Retail Sales Hurt Pound Further
18 February, 2013
Today is President’s Day bank holiday in the USA and there is no major data due out in Europe either, with the exception of ECB President Mario Draghi’s speech at 2.30 this afternoon.
Last week finished on another negative note for the Pound. Retail sales figures, which were expected to show a 0.8% increase from December to January, came in at a disappointing 0.6% decrease, in a disappointing blow for the UK high street and economy in general. December’s figures were also revised down. Sterling gave away ground against all major currencies on Friday, and is now trading at its lowest level against the Euro since November 2011 and against the US Dollar since July last year.
“This probably brings the question of ‘triple-dip’ back on the table again,” noted Rob Wood, economist at Berenberg Bank. “If this is… reflected in output in the rest of the economy, then it could be bad news for Q1,” he added. Needless to say, increased talk of a third UK recession since the financial crisis would send jitters through financial markets and be very likely to affect exchange rates for international payments further.
The next main UK data is on Wednesday when unemployment figures are released, along with the minutes from this month’s Bank of England policy meeting.
Elsewhere this week, Europe is due for a fairly quiet time, but in the US there are a lot of figures due out, so check back through the week for the latest news and how rates are moving.
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