Pound Melemah Menurun Akibat Kinerja Ritel UK yang Suram

The British pound dropped during the early European trading session on Friday after UK retail sales in May disappointed expectations, especially with weak performance from food stores.

Data provided by the Office for National Statistics indicated that UK retail sales fell by 2.7 percent in May compared to the previous month, contrasting with a 1.3 percent increase in April after adjustments. Experts had predicted a decrease of just 0.5 percent.

Although favourable weather in April boosted sales by 4.7 percent, May saw an overall decline of 5 percent, with non-food store sales sliding 1.4 percent.

Excluding auto fuel, retail sales dropped 2.8 percent, reversing a 1.4 percent gain in April and well exceeding the expected 0.5 percent fall.

On an annual basis, retail sales declined by 1.3 percent following a 5.0 percent rise in April. Likewise, sales volume excluding auto fuel fell by 1.3 percent in May after a 5.2 percent increase the previous month.

In other economic news, UK public sector net borrowing increased in May even though government revenues were higher. The Office for National Statistics reported that borrowing reached GBP 17.7 billion, up GBP 0.7 billion from the same period last year, surpassing the forecast of GBP 17.1 billion set by the Office for Budget Responsibility. This represents the second highest May borrowing recorded since 1993.

In the geopolitical arena, ongoing tensions are affecting market sentiment. Israeli Prime Minister Benjamin Netanyahu has ordered intensified strikes on Iranian targets in Tehran, targeting facilities deemed “strategic” and “governmental.” This action follows an Iranian missile strike on a hospital in Beersheba as well as an assault on a leading Israeli research institute known for its work in the life sciences and physics.

Meanwhile, on Thursday, the Bank of England kept interest rates unchanged at 4.25 percent in its latest monetary policy announcement. The disappointing UK retail data has led traders to anticipate further rate cuts later this year. After a 6-3 vote to maintain the current rate, many expect at least two additional cuts before the year ends.

Bank of England Governor Andrew Bailey explained that interest rates remain on a “gradual downward path” and that the central bank will continue its cautious approach to monetary easing. However, he warned of serious risks from rising energy prices and a softening labour market amid escalating tensions in the Middle East.

In Asian trading today, the British pound showed some recovery against major currencies. During early European trading, the pound fell to 0.8552 against the euro, with market watchers expecting support around the 0.86 level. Against the US dollar, Japanese yen, and Swiss franc, the pound dropped from recent highs, and further declines might see support at roughly 1.32 (USD), 193.00 (JPY), and 1.08 (CHF), respectively.

Looking ahead, several key economic indicators are scheduled for release during the New York session, including Canada’s new housing price index for May, April retail sales, the May Producer Price Index, raw material price data, the US Philadelphia Fed manufacturing index for June, the US Consumer Board’s leading index for May, Baker Hughes’ oil rig count, and a Eurozone flash consumer confidence indicator for June.