Decline In U.K. Retail Sales Pull Pound Down
05:46, 23rd October 2014
(RTTNews) - The pound fell against the other major currencies in European deals on Thursday, as retail sales in the U.K. declined more-than-expected in September, pointing that the country's economic recovery is losing traction.
Retail sales fell 0.3 percent in September from a month ago, when it rose 0.4 percent, the Office for National Statistics reported Thursday. This was the first fall in four months. Economists had forecast a 0.1 percent drop for September.
Sales excluding auto fuel also fell by 0.3 percent. Economists had forecast a flat growth for September after rising 0.3 percent in August.
On a yearly basis, retail sales volume including automotive fuel grew 2.7 percent in September, below the expected 2.9 percent rise.
The pound came under pressure yesterday after minutes from the Bank of England's October meeting indicated that the policy makers sounded more downbeat on the recovery, with some saying risks from the euro area have increased in the past month.
The pound hit 1.5999 against the greenback, its lowest since October 16. The pound thus lost 0.3 percent from yesterday's closing quote of 1.6049. The next possible support for the pound-greenback pair lies around the 1.59 zone.
Retreating from an early 10-day high of 1.5324 against the franc, the pound dropped to 1.5241. If the pound extends its slide, 1.515 is possibly seen as its next support level. At yesterday's close, the pair was worth 1.5303.
The pound that rose to a 10-day high of 0.7870 against the euro at 3:15 am ET eased to 0.7914 following the data. Next key support for the pound is likely seen around the 0.795 mark. The pair ended Wednesday's trading at 0.7877.
The Eurozone private sector logged a marginal upturn in growth in October, flash data from Markit Economics revealed.
The headline flash Markit composite output index rose to 52.2 in October from a 10-month low of 52 in September.
The pound pared some of its early gains against the yen with pair trading at 172.15, off early high of 172.56. The pound-yen pair finished trading at 171.93 on Wednesday.
Japan's manufacturing sector expanded at an accelerated pace in October with a PMI score of 52.8, the latest survey from Markit Economics revealed in today's preliminary reading.
That follows the reading of 51.7 in September.
Looking ahead, U.S. weekly jobless claims for the week ended October 18, house price index for August, leading indicators for September and flash manufacturing PMI for October are due in the New York session.
At 10:00 am ET, Eurozone flash consumer sentiment index for October is due.
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