- January 26, 2026
- Posted by: EWGFX
- Category: news
The GBP/USD pair trades in positive territory near 1.3660, the highest since September 17, 2025, during the early European session on Monday. The Pound Sterling (GBP) edges higher against the Greenback on the stronger-than-expected UK Retail Sales and Purchasing Managers Index (PMI) data. Traders will keep an eye on the US November Durable Goods Orders report later on Monday.
Data released by the Office for National Statistics (ONS) on Friday showed that the UK Retail Sales rose 0.4% month-over-month (MoM) in December after falling 0.1% in November. This figure came in better than the forecast of a 0.1% decline in the reported month.
Meanwhile, the core Retail Sales, stripping the auto motor fuel sales, increased 0.3% MoM in December, compared with the previous decline of 0.4% (revised from -0.2%), above the market consensus of a 0.2% drop. The UK S&P Global UK Composite PMI climbed to 53.9 in December, also above expectations, to a 21-month high.
These reports have led some analysts to predict a potential delay in further Bank of England (BoE) rate cuts, which would lift the GBP against the US Dollar (USD). The UK central bank is expected to hold rates steady when it next meets in February. Markets fully price in a quarter-point rate cut by June, according to Reuters.
The US Federal Reserve (Fed) will announce its latest interest rate decision on Wednesday, with expectations that rates will remain unchanged at the 3.50% to 3.75% target range. Traders will closely monitor Fed Chair Jerome Powell’s remarks following the policy meeting, as his insights could provide important clues for the months ahead. Any hawkish comments from Fed officials could provide some support to the USD and act as a headwind for the major pair in the near term.