Sterling actually made some muted gains
20 April, 2018
Sterling actually made some muted gains across its major pairs yesterday deposit retail sales falling flat.
With all the bad weather we had over the first quarter of the year, it’s not a surprise that the retail sales were expected to be down from the month before. Things were actually much worse than forecast though with the actual reading coming in at -1.2 percent for the month, opposed to the -0.5 percent forecast. For the year on year figure, we were actually expecting some growth from the previous year with a reading of 2 percent up from 1.5 percent, but it came in at only 1.1 percent.
It seems sterling still had some support though with investors as over the course of the day the pound manage to rally somewhat, gaining half a cent overall against the single currency and half a cent against the greenback, although lost this by close of trade. This was resulted from lower than expected employment data but better than expected manufacturing survey.
That was until Mark Carney’s comments were reported in the evening where he suggested any interest rate rise for the UK would be delayed (further adding to the thinking following the lower inflation figures) while the Brexit process continued, as “major decisions had to be taken” to include how long the implementation (transition) period would be and how the final deal would shape up. The mixed bag of recent data releases also added to the feeling the Bank might need to take a longer-term view on the economy before deciding whether interest rates warranted another boost.
Today is even quieter in the UK and Europe with nothing of note at all except a speech by MPC member Saunders at 10.30am and German Buba President Weidmann at 12.30pm. Apart from that, we go stateside for the rest of the day when we see Canadian retail sales and inflation readings at 1.30pm. The week closes off with some low key speeches from a couple of Fed members in the US but looks like a day of sentiment led trading and possible profit taking against sterling unless you’re looking to send money to Canada of course. If you are, it may be worth trading sooner rather than later in case the eco stats throw up any surprises. With interest rate rises, the main booster for a currency, seemingly dwindling, those with currency to purchase from sterling might be wise to look at taking to plunge sooner rather than later.
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