The British pound extends gains near 1.3660 despite weak UK retail sales, driven by a softer US dollar amid Treasury bond buyback expectations.
The GBP/USD pair climbed to six-month highs near 1.3660, rising 0.8% for the week, as the US dollar weakened on Treasury bond buyback plans. UK retail sales fell 0.5% in July, matching forecasts, following a 0.7% gain in June, while year-over-year sales growth slowed to 1.6% from 3.8% previously.
The decline in UK consumption was broad-based, with non-fuel sales dropping 0.9% after a 0.9% rise in June. Public sector net borrowing reached GBP 1.8 billion in July, below June’s GBP 12.78 billion but above the expected GBP 0.3 billion. Meanwhile, US Treasury Secretary Scott Bessent indicated bond buybacks could exceed $4 billion per operation, pressuring the dollar.
US 30-year Treasury yields hit 19-year highs earlier this week, prompting the Treasury’s move to boost liquidity and curb the rally. The dollar’s decline supported the pound despite weaker UK economic data.