Sterling fails to rise after strong Retail Sales
17 August, 2018
Thursday’s trading was focussed on UK Retail Sales that were announced early in the morning session. After seeing figures contract in June, analysts were expecting a return to growth in July with a forecast of 0.2% growth. Actual figures, however, came in much stronger at 0.7% and boosted the annual growth from 2.9% to 3.5%, with online purchases and particularly online sales being the main driver for the increase. Yesterday’s Retail Sales data follows 2 consecutive days of stronger figures for the UK, with unemployment dropping to 4% on Tuesday and Inflation rising to 2.5% on Wednesday. Despite all this good news, GBP/EUR has dropped over 0.5% against the Euro, and over a cent against the USD since the figures was released.
Anyone still holding out for better buying rates must now be asking yourself, if a rate hike and a string of positive data cant support the pound, what will in the current market? Ultimately the answer is a satisfactory deal in the current Brexit negotiations, however, 1:30 pm. this could still be 2 months away if it happens at all with the chances of a ‘no deal’ or a ‘bad deal’ as high as 75% currently. Yesterday’s release now wraps up all the key eco stats for the UK for August, meaning there are no more announcements of this sort to help stabilise or improve exchange rates and therefore the pound again finds itself vulnerable to the negative trend and Brexit uncertainty.
The day ahead sees inflation figures for the Euro-zone released at 10:00 am and Canadian inflation at 1:30 pm. For more info on how you can protect yourself in this dropping market, contact your broker today and ask about our popular Forward Contracts.
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