The pound sterling declined, resuming its losses that had stopped for one day, despite the strong retail sales data released recently, which recorded the best pace of increase since April 2021, in a positive sign for the activity of the British economy during the first quarter of this year, but the aversion to risk and the trend towards the US dollar is one of the reasons for this decline.

The pound sterling witnessed a decline against the dollar by 0.2% today, Friday, after the pound had ended Thursday’s trading up by 0.3% against the dollar, the first gain in the last four days.

Note that the data released recently in England showed that British retail sales rose by 3.4% in January, the best pace of increase since April 2021, exceeding market expectations for a rise of 1.5%, which may play a role in the timing of the interest rate cut that led to the inflation and growth data. The economic reports issued this week indicated increasing possibilities of lowering British interest rates starting next May, and those possibilities decreased again today after the retail sales data.

British retail sales are one of the most important indicators of consumer spending, which represents about 70% of the country's gross domestic product. Accordingly, the hot readings show the strong economic activity in the United Kingdom, which is in the direction of an increase in the pound sterling in the foreign exchange market. 

*All data provided is intended for educational or informational purposes only and should not be considered investment advice.