Sterling stopped falling and rebounded ahead of UK retail data, with dollar safe-haven demand limiting the pound's rebound against the dollar.

The pound rallied slightly against the dollar (GBP/USD) in Asian trading on Friday, with the exchange rate recovering to around 1.3320, ending a five-day losing streak. However, against the backdrop of rising risk aversion in global markets, the upside of the pound is still limited, and investors are waiting for the latest UK retail sales data for further clues on the performance of the UK economy and the future policy direction of the Bank of England.

The recent situation in the Middle East has once again become an impactforeign exchange marketImportant factors. The US has launched operations against Iran-related targets for the 13th night in a row, the US Central Command said, and regional tensions continue to rise. US President Donald Trump previously said that the United States will hold Iran accountable for its actions related to the Houthis, and warned of the possibility of "large-scale military punishment". Rising geopolitical risks have boosted the demand for safe havens in the dollar. The dollar typically benefits from safe-haven inflows during periods of declining market risk appetite, while risk-sensitive currencies such as the pound are vulnerable to pressure. Therefore, despite the technical rebound of the pound against the dollar, the strength of the dollar may still limit the short-term upside of the exchange rate.

At the same time, domestic economic data in the UK became the focus of market attention. UK retail sales data for June are expected to show a 0.3% decrease from the previous month, after rising in May1.2%If the actual data is stronger than market expectations, it may strengthen market confidence in the resilience of the UK economy and support the Bank of England to maintain a tighter policy stance, which will benefit the pound

The Bank of England is widely expected to leave its base rate unchanged at its policy meeting next week. Market pricing suggests that the Bank of England may continue to hold interest rates at3.75%Level to assess the impact of the situation in the Middle East on energy prices, inflationary pressures and economic growth. Investors expect the Bank of England to have limited room for future policy adjustments, and market expectations for the path of interest rate cuts or interest rate hikes before the end of 2026 have not changed much. Analysts believe that the current trend of the pound is mainly influenced by the combination of UK economic data, Federal Reserve policy expectations and global risk sentiment.

Bank of Scotland analysts pointed out that the market now generally expects the Bank of England's next monetary policy committee meeting will not adjust interest rates, the base rate is expected to remain at3.75%This stabilization policy is expected to serve as an important backdrop for the recent sterling trading, and the market will rely more on British economic data to find direction.

From the perspective of market performance, the pound has recovered after its recent decline, but the overall situation is still weak. If the UK retail sales performance is weak, it may strengthen the market's concern about the slowdown of the UK economy and weaken the momentum of the pound's rebound. On the contrary, if the data is significantly better than expected, it may prompt the market to reassess the policy outlook of the Bank of England.

From the perspective of the daily structure, the pound against the dollar has gained some support near 1.3300 after a recent series of pullbacks, and there are signs of stopping falling in the short term. At present, the exchange rate is still running below the short-term moving average.Ava ForexThe overall trend is weak. The upper resistance focuses on the 1.3380 to 1.3400 area, and a break through this area could further test the pressure around 1.3450. The lower support focuses first on the 1.3300 integer mark, followed by the 1.3250 area, which could open up further downside if broken.

From the four-hour trend, the pound has rebounded against the dollar in the short term, but the upward momentum is still limited. The MACD indicator shows that the short momentum has weakened, and the RSI indicator has rebounded from the low level, indicating that there is a need for repair in the short term. However, the price still needs to break through the pressure of the key moving average to confirm the trend reversal. If the exchange rate regains its foothold above 1.3380, the short-term rally may continue; if it falls below 1.3300 again, the previous low may be re-tested.

edit summary

Sterling against the dollar is currently in a phase of multiple factors. On the one hand, the Bank of England maintains a high interest rate level and the UK economic data may improve, providing some support for the pound; on the other hand, the escalation of risks in the Middle East has promoted the strengthening of safe-haven demand for the dollar, which has suppressed the pound.

In the short term, UK retail sales data will be an important catalyst for the direction of the pound. If the economic data improves, the market may raise expectations for the Bank of England to maintain tightening policy, driving the pound to rebound. But if the data are weak and the global risk aversion continues to rise, the pound may continue to face pressure.

The future trend still needs to pay attention to the performance of the UK economy, the policy signal of the Bank of England and the change of the demand for safe haven in the US dollar. Before the risk event is significantly eased, the pound is likely to maintain a volatile pattern against the US dollar.