UK Retail Sales Preview: GBP/USD may fall even if consumption recovers as expected

UK Retail Sales are set to leap in June in comparison to May but remain depressed when looking at the same month in 2019. In case the figures largely meet expectations, GBP/USD has room to fall, FXStreet’s analyst Yohay Elam reports.

Key quotes

“The consensus of economists pointing to a leap of 8% in sales in June after 12% in May. The UK's process of returning to normal, deferred expenditure from the lockdown days, and the immense furlough scheme make such expectations realistic.”

“The year over year figures may provide a better view of where sales are in comparison to last year, which saw stable growth. Projections stand at an improvement – albeit from a crash of 13.1% to -6.4% – a considerable gap.”

“A significant upside surprise would send sterling higher and a considerable miss would trigger a downfall. Moreover, GBP/USD faces several headwinds such as bitter relations with China, a Brexit impasse and rising US Covid-19 cases, that may slow any recovery, even if monthly consumption leaps.”