EUR/USD and GBP/USD struggled mightily on Tuesday during the American trading session. The EUR/USD cross traded over 1.1550, continuing a minor increase after the poor US Retail Sales Report. At the same time, GBP/USD stayed south of the 1.3600 level, further reflecting the bearish sentiment dominating the currency market.
The US Dollar’s lure quickly faded following badly missed retail sales data, sending the greenback lower across the board. This underperformance put significant pressure on the EUR/USD & GBP/USD currency pairs. These moves were largely driven by traders reacting to overall weak demand for the US Dollar. A barrage of adverse economic indicators have spooked investors and driven them towards the safety of cash. Recent flareups in the Middle East have further soured market mood.
Given EUR/USD swings up and down within 30 pips of 1.1550, these range-bound characteristics are just evident within this regional trading condition. The two have drifted just a tad to the north. This has been a strong reaction based on disappointing retail sales, drumming up a sudden hawkish and sullied investor spirit and throwing a curveball of uncertainty into the currency markets.
GBP/USD stayed pressured, trading below the key 1.3600 figure in Tuesday’s Asia-Pacific trading. Weak retail sales and intensifying geopolitical discord weighed heavily on the British Pound. This led to it rapidly losing steam against the US Dollar. The demand for the US Dollar continues to look rather weak. Consequently, GBP/USD found it difficult to hold above the important mark of 1.3600.
Market observers pointed out that the continuing risk aversion due to conflict in the Middle East has had a detrimental impact on trading sentiment for GBP/USD. Investors are taking a cautious stance, focusing on home-grown economic data along with external factors that may affect market conditions.