Pound Retreats from Three-Week High Amid Risk-Averse Markets
The British Pound (GBP) has retreated from its three-week high against the US Dollar (USD), falling short of 1.3340. Despite upbeat UK data, including a strong Preliminary S&P Global Purchasing Managers Index (PMI) and Retail Sales reports for July, investors remain risk-averse due to growing fiscal concerns in the UK.
The PMI for manufacturing rose to 52.8 from 52.5 in June, exceeding market expectations of a slowdown to 52.0. The Services PMI returned to expansion levels at 51.8 in July from 48.8 in June, beating market expectations of a milder improvement to 49.4.
Additionally, National Statistics released data showing an unexpected 1% increase in retail consumption in June, surpassing the market consensus of a 0.3% decline. Year-over-year, Retail Sales increased 4.2%, nearly twice the 2.3% increment forecasted by market experts.
However, these positive UK data releases failed to offset the US Dollar's strength amid increasing risk-averse markets. Reports of attacks on Saudi vessels in the Red Sea have pushed Brent Oil to levels near $100, fuelling inflationary concerns across the globe and sending US Treasury yields to multi-month highs.