GBP/USD drops below $1.70 as Retail Sales Miss Estimate

The pound weakened for a seventh day against the dollar after retail sales rose less in June than economists forecast, adding to speculation the Bank of England will be slower to raise interest rates than expected.

Sterling had its longest losing streak in 18 months as technical analysis suggested the U.K. currency remained overvalued. U.K. government bonds dropped with Treasuries and German bunds as euro-area manufacturing and services data exceeded analysts forecasts, damping demand for safer assets.

“There is potential for the pound to move significantly lower,” said Peter Kinsella, a senior currency strategist at Commerzbank AG in London. “The currency is trading too high relative to where swap spreads should be trading. The risk-reward isn’t great in going long cable at these levels.”

Bloomberg

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