Sterling fell in European trade on Friday on track for the third straight loss against the dollar away from a two-month high on active profit-taking.
Grim UK retail sales data in October indicated the likely recession of the UK economy in the final quarter of the year, and paved the way for an early interest rate cut by Bank of England next year.
GBP/USD
GBP/USD fell 0.3% to 1.2380, with a session-high at 1.2422, after closing down 0.1% on Thursday, the second loss in a row on profit-taking off two-month highs at 1.2505.
Grim Data
UK data showed retail sales fell 0.3% in October, while analysts expected a rise of 0.5%.
Retail sales merchants said in the report that higher living costs and the wet weather in October contributed to the decline.
Such data clearly indicates the rapid recession of the UK economy in the fourth quartet of the year, and will likely force Bank of England to cut interest rates earlier than expected in 2024.
Goldman Sachs expects Bank of England to cut interest rates by 25 basis points in February 2024.
Earlier UK consumer prices data this week also showed prices have slowed down to two-year lows.
Such data reduces the pressure of inflationary pressures on BoE and confirms the end of the current cycle of policy tightening.