GBP Surges Against USD Amid Downbeat Retail Sales, Treasury Bond Buybacks Weigh On Dollar

The British Pound has maintained its gains against the US Dollar on Friday, pushing against six-month highs at the 1.3660 area. This comes despite a downbeat UK Retail Sales report showing consumption fell 0.5% in July.

According to data released by National Statistics, retail sales contracted in July, reversing the 0.7% increase seen in June. Year-over-year, sales increased at a 1.6% pace, below the consensus 2.2%. The decline was broad-based, with all product categories excluding fuel falling 0.9% in July.

The US Dollar remains on its back foot due to the Treasury's bond buyback plans, which aim to stem the yield rally. Strategists at BBH warn that investors may come to believe the Treasury is managing yields rather than liquidity, undermining US fiscal credibility and weighing on the USD.