When are the UK retail sales and how could they affect GBP/USD?

The UK retail sales Overview

The UK retail sales data is expected to edge higher to 0.4% m/m in November, while on annualized basis, retail sales are seen ticking higher to 0.3%. In October, retail sales were seen firmer at 0.3% over the month and -0.3% annually. Meanwhile, core retail sales data, excluding fuel, are expected to come in at 0.5% m/m and 0.4% y/y. The report will be published later this session at 0930 GMT.

Deviation impact on GBP/USD

Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 10 and 70 pips in deviations up to 3.5 to -1.5, although in some cases, if notable enough, a deviation can fuel movements of upto 100 pips.

How could affect GBP/USD?

A stronger retail sales report could offer fresh impetus to the GBP bulls, taking the rate back above the 1.3450 barrier. While GBP/USD could breach 1.3400 support should the data disappoint the markets. However, the knee-jerk moves on the UK data may be short-lived, as investors look forward to the BOE rate decision for the next direction.

According to Jim Langlands at FX Charts, “While the daily charts look inconclusive the short term momentum indicators are pointing to further gains for Sterling, so buying dips towards 1.3370, with a SL below 1.3310 would seem to be a plan, looking for a run back to 1.3500 and possibly towards 1.3520 – last week’s high.”

Key notes

UK: Retail sales expected to have fallen in November despite Black Friday – Lloyds Bank

We look for a decline in monthly sales volumes fell in November. We look for a 0.5%m/m drop, which would take the annual growth rate to -0.6% – its lowest since Q1 2013.”

About the UK retail sales

The retail Sales released by the Office for National Statistics (ONS) measures the total receipts of retail stores. Monthly percent changes reflect the rate of changes of such sales. Changes in Retail Sales are widely followed as an indicator of consumer spending. Generally speaking, a high reading is seen as positive, or bullish for the GBP, while a low reading is seen as negative or bearish.