Friday’s poor UK retail sales continu e to weigh on pound

7 months ago


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With nothing else to focus on yesterday, markets continued to sell the pound in response to Friday’s gloomy retail figures
 


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Daily Market Analysis


February 20th 2018

 

Friday’s poor UK retail sales continue to weigh on pound



With nothing else to focus on yesterday, markets continued to sell the pound in response to Friday’s gloomy retail figures.


The pound has slumped this morning. GBP/EUR is flat at €1.1280, but GBP/USD has fallen -0.3% to US$1.3946. GBP/AUD has dropped -0.4% to AU$1.7624, GBP/NZD has fallen -0.2% to NZ$1.8964, and GBP/CAD has weakened -0.2% to C$1.7556.


Keep reading to see why GBP/EUR may not record losses today, even though the latest industry data is forecast to weaken on previous readings…


 
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Today's Rate


Euro (EUR)
1.12892
US dollar (USD)
1.3957
Australian dollar (AUD)
1.76263
S. African rand (ZAR)
16.359
Japanese yen (JPY)
149.406
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The rates above are using the British pound (GBP) as the base rate. All rates are for indication purposes only.
Prices can vary dramatically based on amount and delivery date.


 
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"The pound was on poor form yesterday, with Friday’s disappointing retail sales figures continuing to weigh on the UK economic outlook."



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What’s been happening?

The pound was on poor form yesterday, with Friday’s disappointing retail sales figures continuing to weigh on the UK economic outlook.


With no data on the calendar, markets had little reason to buy into the pound, with many still worried that the UK economy’s vital service sector is set to slow as consumers rein in their spending in the face of surging inflation and a slow rate of pay growth.


GBP/EUR was able to hold around opening levels, however, as markets were awaiting the results of two Eurogroup meetings.


The first was a discussion regarding the Greek bailout, so investors were watching closely for any signs finance ministers believed Athens was not implementing sufficient reforms to justify any future cash pay-outs.


The second meeting was to decide who should be Vice-President of the European Central Bank (ECB) when Vitor Constancio stepped down.


Although US markets were closed yesterday for the Presidents’ Day public holiday, and the data calendar was therefore empty, GBP/USD slumped; odds of over 81% that the Federal Reserve will hike interest rates in March kept demand for USD robust.


 
 
What's coming up?

Today’s Confederation of British Industry (CBI) data for February is the only ecostat on the UK’s economic calendar.


The CBI total orders and selling price trends indices could see the pound weaken, with the forecast for total orders showing economists expect a decline in the index from 14 points to 11 points.


However, losses against the euro could be contained as today’s German and Eurozone ZEW economic sentiment survey results for February are expected to show weakening optimism.


Eurozone consumer confidence data is also expected to show weakening sentiment later in the afternoon, so markets may not be feeling too upbeat on the euro today.


There is no US data of note set for publication today, but those super-high odds of an interest rate hike from the Federal Reserve next month could support USD higher, especially if the pound and euro are weakening.


We’re here to talk currency whenever you need us, so get in touch if you want to know more about the latest news or how it could impact your currency transfers.


 
 


Reaz Rahman
Senior Dealer



Reaz, our Senior Currency Dealer, joined us in January 2015. Reaz draws on his detailed knowledge of the foreign exchange markets to help customers to choose the right service and time to transfer.


  


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