Pound falls on Retail Sales

17th September 2010
Good morning. Sterling started yesterday well, recovering against most currencies. However Retail Sales figures were much worse than expected, and as a result the pound has fallen to lows against the Euro. Rates as at 08:30am are as follows:

GBP/EUR 1.1953

GBP/USD 1.5703

GBP/AUD 1.6609

GBP/NZD 2.1463

GBP/CAD 1.6045

GBP/CHF 1.5950

GBP/ZAR 11.175

GBP/DKK 8.8963

GBP/JPY 134.81

EUR/USD 1.3885

Pound falls on Retail Sales

Sterling fell to a 7 week low against the Euro on Thursday, after data showed UK retail sales fell unexpectedly in August and strong demand at an auction of Spanish debt lifted the single currency. The data was seen as a sign that UK consumers may be reining in spending ahead of substantial spending cuts planned by the government later in the year.

As soon as the figures were released, Sterling fell around 0.7% against most currencies including the Euro. The Eurozone economy is also recovering faster than thought, and this is also making the single currency more expensive to purchase.

Today’s Data

Today we have inflationary measures from the United States and Germany. Higher than expected inflation increases the chance of higher interest rates. This in turn strengthens the currency due to the higher return, making it more expensive to purchase. So, higher Consumer Prices than expected from an economic zone, expect their currency to become more expensive to buy.

There are no significant data releases from the UK today.

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On Monday, we’ll have a detailed GBP/EUR and GBP/USD forecast, in addition to the weeks economic data that may affect rates. Enjoy your weekend.

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