US retail sales are flat-lining but this may be keeping the pound strong against the dollar

Nawaz Ali, UK Currency Strategist at Western Union Business Solutions (UK) Ltd, comments on the US retail sales data today:

“US retail sales seem to be flat-lining as this is the third month in a row that we’ve seen sub-zero growth in the data. Consumer spending, the biggest driver of US economic growth, is still far from robust and remains unpredictable.

“If tomorrow’s US consumer price inflation data also misses expectations, the Federal Reserve is unlikely to raise interest rates any time soon, which should lead to a weaker US dollar for longer.

“It’s this unwinding of the US interest rate hike expectations that is helping to keep Sterling above the psychologically important $1.4000 trading level for almost six weeks now, despite the uncertainly around the referendum.”