GBP/USD rebounds above 1.3450 toward 39-month highs, UK Retail Sales eyed
GBP/USD posts gains of about a quarter of a percent in the Asian hours on Friday, trading around 1.3450 at the time of writing. The pair edges higher as the Pound Sterling (GBP) attracts buyers after the GfK better-than-expected Consumer Confidence Index for the United Kingdom (UK) was released. Traders await UK Retail Sales, scheduled to be released later in the day, expecting a monthly decline for the third consecutive period in April.
On Friday, the UK Consumer Confidence Index rose by 3 points to -20 in May, better than the expected reading of -22 and reversing from April’s -23 reading. However, consumer sentiment remains cautious as the index remains well below its long-term average.
However, the British Pound dipped slightly as data showed on Thursday that the seasonally adjusted UK Manufacturing Purchasing Managers’ Index unexpectedly fell to 45.1 in May from 45.4 in April, as the market forecast was a 46.0 reading in the reported period. Meanwhile, the Preliminary UK Services Business Activity Index rose to 50.2 in May against the previous 49.0 reading and the expected 50.0 figure.
The GBP/USD advanced as the Greenback stepped down, driven by a decline in US Treasury yields. The 30-year US bond yield pulled back from 5.15%, the highest in 19 months, due to growing concerns regarding the increase in the fiscal deficit in the United States (US), while Trump's “One Big Beautiful Bill” is on its way to the Senate floor.
The US House of Representatives approved Trump’s budget by one vote on Thursday, which would deliver tax breaks on tip income and US-manufactured car loans. The proposal is expected to increase the deficit by $3.8 billion, according to the Congressional Budget Office (CBO).
Source: Fxstreet
