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Strong Retail Sales Could Propel Pound Further

H.S. Borji
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Strong Retail Sales Could Propel Pound Further

A lack of economic data didn’t hold back the British pound today, as England’s currency continued to strengthen versus the US dollar and euro ahead of a key retail sales report.

Thursday’s report on UK retail sales, courtesy of the Office for National Statistics, could show a monthly increase of 0.5 percent. Annually, this would translate into a gain of 2.5 percent. Retail receipts tumbled 1.5 percent in January, the steepest one-month loss in nearly two years. Compared to the previous 12 months, retail revenues were up 4.3 percent in January, the ONS reported last month.

The January data didn’t harm the outlook on the retail industry, which is susceptible to seasonal volatility that often distort sales trends. Separate data from the Confederation of British Industry this week said demand at retail stores eased in March, due in part to the later timing of Easter this year. However, expected sales volumes for April rose to the highest levels since December 2010, CBI survey data showed.

The British pound rose for the third consecutive day versus the US dollar, hitting a session high of 1.6582. The pair would later consolidate at 1.6570, adding 0.25 percent.

The Commerce Department is scheduled to post revised fourth quarter GDP data Thursday. The National Association of Realtors will release a key report on pending home sales.

The euro fell further Wednesday, as the forex markets continued to analyze remarks from European Central Bank Deputy Governor Jens Weidmann, who said on Tuesday the central bank was considering quantitative easing. The EURGBP pair fell nearly half a percent to 0.8325.

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