GBP/USD is underperforming on weak economic data and tested the November 2020 low near 1.2855. Economists at BBH expect cable to extend its slide towards the September 2020 low near 1.2675.

UK reported weak March retail sales data

“Headline sales came in at -1.4% MoM vs. -0.3% expected and a revised -0.5% (was -0.3%) in February, while sales ex-auto fuel came in at -1.1% MoM vs. -0.4% expected and a revised -0.9% (was -0.7%) in February.  

“Manufacturing came in at 55.3 vs. 54.0 expected and 55.2 in March, services came in at 58.3 vs. 60.0 expected and 62.6 in March, and the composite PMI came in at 57.6 vs. 58.7 expected and 60.9 in March.”

“It’s clear from today’s data that the economy was already slowing before we moved into Q2, which will bring even greater headwinds that include hikes in payroll taxes and the cap on household energy costs.”

“Cable continues to sink and traded today at a new low for this move near 1.2860, just above the November 2020 low near $1.2855.  Further losses are likely and a break below that low would target the September 2020 low near 1.2675.”