UK retail sales showed an improvement in November. While the UK’s GDP in Q3 was lower. The GBP/USD pair fluctuates around the 1.2720 mark during the Asian session on Wednesday. The US Dollar (USD) is under pressure against the Pound Sterling (GBP) amid growing speculation of potential easing by the US Federal Reserve (Fed).

Weakening sentiment has been reinforced by falling US Treasury bond yields, adding to the factors undermining USD strength. Yields on 2-year and 10-year US bonds are falling and currently stand at 4.29% and 3.88% respectively. Former Dallas Federal Reserve President Robert Kaplan emphasized that the Federal Reserve has made mistakes in the past with prolonged over-stimulation of the economy despite positive economic indicators. In his opinion, the central bank is now wary of repeating that mistake, trying to avoid over-restraint and hindering economic growth.

The British Pound (GBP) found support on Friday thanks to better than expected United Kingdom (UK) retail sales data for November. Retail Sales (month-on-month) rose 1.3%, beating the forecast of 0.4% and recovering from October’s stagnant 0.0%. Retail sales (y/y) beat market expectations, registering an increase of 0.1% compared to an expected decline of 1.3%. This was a turnaround from the previous decline of 2.5%.

Recommendations: On a bounce from 1.2700 level, Buy positions can be gained