Sterling supported by strong Retail Sales

Retail Sales

The Pound tailed off yesterday slightly against the Euro, but has bounced back strongly this morning. Theresa May’s speech last night to EU leaders didn’t excite the markets much, with GBP/EUR starting the day at around €1.1250.

This morning however UK Retail Sales smashed forecasts, showing a gain of +0.3%. Analysts had expected a drop of -0.2% so the number shows the resilient nature of the UK economy. Retail Sales are a very good overall barometer of how the economy is doing, and the better than expected number has pushed GBP/EUR back up to the €1.13 mark.

Sterling has also risen against the Dollar this morning, rising to $1.32. This is very good considering this pair was as low as $1.28 just a few weeks ago.

Will the Pound rise or fall today?

We’ve already had all the UK data for today, which as I’ve mentioned above has pushed the Pound up against other currencies. The main mover for GBP/EUR rates will be the EU leaders summit in Salzburg. Theresa May leaves before lunch, leaving the leaders of the remaining 27 nations to discuss various things.

I’m sure Brexit will be high on the agenda, and we could possibly see announcements at any time. Anything that signals progress will send the Pound higher. However if it looks like the EU will continue to refuse to make any concessions, the Pound will probably fall as it would increase the chances of leaving with ‘No Deal’.

Elsewhere, we have some jobless numbers due from the USA at 13:30pm. Most focus today however will be on any news that comes from the EU summit.

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