On Friday afternoon, GBPUSD stopped falling but the market sentiment didn’t get any better.
At the end of the week, the British Pound remains weak against the USD, although it did stop falling. The current quote for the instrument is 1.2439.
Yesterday, the Bank of England had another meeting, where it kept the key interest rate intact at 0.10%. Also, the British regulator expanded the Quantitative Easing program up to £745B. Earlier, it was £645B. This move was pretty much expected, that’s why it didn’t really surprise investors. However, the Pound always heeds the voice of reason, so it decided to retreat in response to the watering-down of the monetary policy.
At the same time, the Bank of England hinted at a possible additional expansion of the QE program, in case the country’s economy requires. Negative interest rates weren’t discussed, which means that the economy can deal with the situation by itself so far.
The statistics published today showed that the Retail Sales added 12.0% m/m in May after losing 18.0% m/m in April and against the expected reading of +6.3% m/m. On YoY, the indicator showed -13.1% against the expected reading of -17/1%.
Of course, the retail sector will feel much better after consumers return to shopping but it won’t happen very quickly; the Brits have always been very careful with their money, so during the coronavirus pandemic and Brexit they will think twice before spending any extra amount.
Orgin: RoboForex
