Pound Rebounds As U.K. Retail Sales Rises More-than-Expected
July 20 2017 - 1:12AM
RTTF2
The British pound recovered from recent highs against other
major currencies in the early European session on Thursday, after
data showed that U.K. retail sales recovered at a faster than
expected pace in June.
Data from the Office for National Statistics showed that U.K.
retail sales grew 0.6 percent month-on-month in June, reversing a
1.1 percent fall in May. Sales were forecast to gain 0.4
percent.
Excluding auto fuel, retail sales climbed climbed 0.9 percent,
in contrast to a 1.5 percent decrease in the previous month.
Economists had forecast a 0.5 percent increase.
On a yearly basis, retail sales growth accelerated to 2.9
percent in June from 0.9 percent a month ago. This was also faster
than the expected 2.5 percent.
Likewise, sales volume excluding auto fuel improved to 3 percent
from 0.6 percent. Sales were forecast to grow 2.5 percent.
Meanwhile, European stock markets traded higher after the Bank
of Japan kept its monetary stimulus intact and sounded more upbeat
about the economy, but downgraded its outlook for inflation.
Investors braced for the European Central Bank's rate decision and
President Mario Draghi's press conference for clues as to whether
the central bank will begin paring stimulus measures.
In the Asian trading today, the pound held steady against its
major rivals.
In the early European trading, the pound rose to 0.8833 against
the euro and 1.2458 against the Swiss franc, from an early 2-day
lows of 0.8866 and 1.2411, respectively. If the pound extends its
uptrend, it is likely to find resistance around 0.87 against the
euro and 1.27 against the franc.
Against the yen, the pound advanced to 146.27 from an early low
of 145.57. The pound may test resistance around the 148.00
region.
The pound edged up to 1.3017 against the U.S. dollar, from an
early 6-day low of 1.2972. On the upside, 1.31 is seen as the next
resistance level for the pound.
Looking ahead, the European Central Bank is set to announce its
interest rate decision at 7:45 am ET. The bank is expected to keep
its refi rate at zero percent and the deposit rate at -0.4 percent.
The announcement will be followed by a press conference at 8:30 am
ET.
In the New York session, U.S. weekly jobless claims for the week
ended July 15, U.S. leading indicators for June, U.S. Federal
Reserve Bank of Philadelphia's manufacturing index for July, and
Eurozone consumer confidence index for July are slated for
release.
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