UK markets focus on Retail Sales

Wednesday’s trading offered little to report on with an absence of any key data. This lead to flat trading as the pound finished the day more or less where it began. The markets are now awaiting one of the last main data release for the UK this month, which comes in the form of Retail Sales figures at 9:30am. Analysts are expecting a growth figure of 0.4% in June, up from -1.2% in May. It is however worth pointing out that UK Retail Sales have disappointed in recent months, coming off the back of its worst quarter of growth since 2010 and as such there is little optimism for any upside surprises.

The other main event today is an interest decision from the ECB and the all-important press conference with Mario Draghi at 1.30pm. The next few ECB meetings carry a lot of risk for Euro buyers, as the markets are anticipating further indications of policy tightening and ultimately a reduction to their asset purchase programme that would see the Euro strengthen further. Whilst no change to policy is expected to be announced today, the Euro could still see bigger moves off any indications that the ECB are indeed moving towards policy change in the next few months.

GBP/EUR rates remain under pressure with the strength of the Euro, and with the pound also struggling off poorer data in recent weeks. Rates have been relatively stable within a 2% range since the UK election but risks remain to the downside with little expectations of any significant improvements anytime soon. GBP/USD however remains more stable with the USD much weaker than the Euro and matching the pound at present.

If you are still holding out to time your currency exchange, keep a close eye on today’s data as after this there is little for Sterling to go on in the next couple weeks until the next round of new monthly data in August. To discuss in more detail contact your broker today on 0800 043 2623.