GBP/USD Drops to Near 1.60 after Retail Sales

The pound fell a third day versus the dollar, the longest losing streak in almost three weeks, after a report showing retail sales slid more in September than analysts forecast added to concern the economy is faltering.

Sterling weakened versus most of its 16 major peers as the Office for National Statistics said the volume of Britain’s sales including auto fuel decreased 0.3 percent from August. Analysts predicted a 0.1 percent reduction, according to the median estimate in a Bloomberg News survey. U.K. government bonds dropped a third day as Bank of England policy maker Ben Broadbent said the central bank will increase interest rates when economic “headwinds” fade.

“A lot of the fears about the economy are now materializing and the bottom line is the downside for sterling is still there,” said Neil Mellor, a currency strategist at Bank of New York Mellon in London. “Sterling was being bid up right to $1.70, largely because the Bank of England was the only central bank, the Federal Reserve aside, that appeared likely to start raising interest rates.”

Bloomberg

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