Pound Slides As U.K. Retail Sales Fall More Than Forecast
19 Aprile 2018 - 7:42AM
RTTF2
The pound dropped against its major counterparts in early
European deals on Thursday, as a steeper than expected drop in U.K.
retail sales in March reduced hopes for a Bank of England interest
rate hike next month.
Data from the Office for National Statistics showed that retail
sales including auto fuel, dropped 1.2 percent month-on-month in
March, in contrast to a 0.8 percent rise in February. Sales were
forecast to fall 0.6 percent.
Similarly, excluding auto fuel, retail sales volume dropped 0.5
percent reversing a 0.4 percent rise in February. Economists had
expected a 0.4 percent decrease.
On a yearly basis, overall retail sales volume growth eased to
1.1 percent in March from 1.5 percent a month ago. Economists had
forecast sales to grow at a faster pace of 1.9 percent.
Sales, excluding auto fuel, also grew by 1.1 percent after
rising 1.2 percent in the previous month. The expected rate of
growth was 1.4 percent.
Meanwhile, European shares were mixed as investors digested a
slew of earnings reports and looked ahead to the 2018 Spring
Meetings of the International Monetary Fund and the World Bank
Group.
The currency traded mixed against its major counterparts in the
Asian session. While it held steady against the euro and the
greenback, it rose against the franc and the yen.
The pound declined to a 1-week low of 1.4162 against the dollar,
from a high of 1.4219 hit at 3:00 am ET. On the downside, 1.39 is
likely seen as the next support for the pound.
The pound slipped to a 3-day low of 1.3721 against the Swiss
franc and a weekly low of 151.99 against the yen, coming off from
its early highs of 1.3771 and 152.70, respectively. The pound is
likely to find support around 1.34 against the Swiss franc and
150.00 against the yen.
Having advanced to 0.8709 against the euro at 2:15 am ET, the
pound reversed direction and dropped to an 8-day low of 0.8736. The
pound may target support around the 0.89 level, if it drops
further.
Data from the European Central Bank showed that the euro area
current account surplus declined in February.
The current account surplus fell to a seasonally adjusted EUR
35.1 billion in February from EUR 39 billion in January.
Looking ahead, Federal Reserve Governor Lael Brainard will speak
about regulatory reform at the Global Finance Forum in Washington
DC at 8:00 am ET.
In the New York session, U.S. weekly jobless claims for the week
ended April 14 and leading index for March are scheduled for
release.
Federal Reserve Governor Randal Quarles testifies on supervision
and regulation before the Senate Banking Committee in Washington DC
at 9:30 am ET.
The Bank of England Deputy Governor Jon Cunliffe will speak at
the Global Finance Forum in Washington DC at 12:30 pm ET.
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