GBP/USD holds below the mid-1.2700s, what’s next ?

The British Pound fell against the US Dollar in early trading on Tuesday in Asia. The recovery in the US currency provided some support to the pair. At present, the price of the GBP/USD is around 1.2725.

The sharp decline in the US Dollar during the latter part of the day on Thursday helped boost the value of the British pound against the US currency. The pair was able to recover some of its losses and is currently trading at 1.2700. Friday’s data release from the UK will provide investors with more insight into the country’s retail sales. According to the ONS, retail sales increased by 1.3% in November.

The UK’s retail sales report released by the ONS was well-above the market’s expectations, and it was able to increase by 0.4% in November. However, it was also revealed that the country’s GDP growth for the previous quarter was revised down to 0.3% from the previously estimated 0.6%. Later in the day, the Bureau of Economic Analysis is expected to release the PCE price index for November.

Economists expect the Core PCE price index to increase by 0.2% in November, following a rise of 0.3% in October. A disappointing print could make it harder for the US dollar to gain strength against the pound. In addition, investors will be keeping an eye on Wall Street throughout the Christmas holiday.

After a strong rally on Thursday, US stock index futures are currently trading lower. The Dow Jones Industrial Average and the S&P 500 are expected to open lower by around 0.2% and 0.4%, respectively. A negative reaction in risk sentiment could cause the US dollar to gain strength.