GBP/USD oversteps 1.2480 on a lower-than-expected plunge in UK Retail Sales at -4.9%

• GBP/USD has climbed to near 1.2490 as the UK Retail Sales have landed at -4.9%.
• The annual UK Retail Sales ex. oil have been recorded at -6.1%.
• The DXY has surrendered its entire Asian session gains amid a rebound in the risk-on impulse.

The GBP/USD pair has witnessed some significant bids as the UK’S Office for National Statistics has reported the annualized Retail Sales at -4.9%. The UK’s agency was expected to report the annual UK Retail Sales at -7.2%, explosively lower than the prior positive release of 0.9%.

Also, the annual Retail Sales that don’t include fossil fuels have landed at -6.1%, less negative than the estimates of -8.45 and the previous release of -0.6%. This has raised the odds of chances of a recession in London. The UK administration is already facing the heat of mounting inflationary pressures.

On Wednesday, the annual UK Consumer Price Index (CPI) landed at 9%. The figure was a little lower than the expectation of 9.1% however, a figure of 9% is itself a mess for a country whose households must be going through soaring inflation-adjusted paychecks. Rising food and commodity prices are impacting the real income of the households. There is no denying the fact that the Bank of England (BOE) will resort to announcing a 50 basis point (bps) interest rate hike to fix the inflation mess.

On the dollar front, the US dollar index (DXY) has surrendered its entire intraday gains and has turned negative. The asset is expected to display further losses after slipping below Thursday’s low at 102.66. The DXY is facing an extreme sell-off as a risk-on impulse has rebounded sharply and the safe-haven assets are losing their appeal.