Pound Climbs As U.K. Retail Sales Rise Most In 7 Months
December 14 2017 - 12:55AM
RTTF2
The pound advanced against its major rivals in early European
deals on Thursday, after a data showed that U.K. retail sales grew
the most in seven months in November.
Figures from the Office for National Statistics showed that
retail sales volume climbed 1.1 percent on a monthly basis in
November, with strong contribution from households goods stores.
This was the biggest increase since April, when sales advanced 1.9
percent.
Sales were forecast to grow marginally by 0.4 percent after
expanding 0.5 percent in October.
Excluding auto fuel, retail sales volume growth improved to 1.2
percent from 0.4 percent in the previous month. Economists had
forecast a moderate 0.4 percent increase.
Meanwhile, European shares dropped, as investors awaited
monetary policy statements from the European Central Bank and the
Bank of England.
Although the hike in U.S. interest rate is a positive for the
banking sector, most bank stocks in Europe are struggling to edge
higher due to concerns voiced by Janet Yellen, the U.S. Federal
Reserve chief.
The currency rose against its major rivals in the Asian session
amid rising risk appetite, as the U.S. Federal Reserve raised its
benchmark interest rate by a quarter point as widely expected, and
struck a dovish tone on future rate hikes amid stubbornly low
inflation.
The pound advanced to a 3-day high of 151.88 against the yen,
from a low of 150.76 hit at 5:00 pm ET. If the pound rises further,
153.00 is possibly seen as its next resistance level.
Data from the Ministry of Economy, Trade and Industry showed
that Japan's industrial production rebounded as initially estimated
in October.
Industrial production rose a seasonally adjusted 0.5 percent
month-over-month in October, reversing a 1.0 percent decline in
September. That was in line with the flash data published on
November 29.
Having fallen to 0.8830 against the euro at 6:45 pm ET, the
pound reversed direction and advanced to a 3-day high of 0.8780.
Continuation of the pound's uptrend may see it challenging
resistance around the 0.86 area.
Flash survey data from IHS Markit showed that Eurozone private
sector activity expanded at the fastest pace in nearly seven years
in December.
The headline composite output index climbed to an 82-month high
of 58.0 in December from 57.5 in November. Meanwhile, the index was
expected to fall to 57.2.
The pound climbed to a 3-day high of 1.3299 against the franc,
following a decline to 1.3198 at 5:00 pm ET. On the upside, 1.34 is
likely seen as the next resistance for the pound-franc pair.
The pound strengthened to a 6-day high of 1.3465 against the
greenback, off its early low of 1.3398. The next possible
resistance for the pound is seen around the 1.36 region.
Looking ahead, the Bank of England publishes the decision of
monetary policy committee and the minutes of the meeting at 7:00 am
ET. The bank is widely forecast to hold the bank rate at 0.50
percent and the asset purchase programme at GBP 435 billion.
At 7:45 am ET, the European Central Bank announces its rate
decision. The main refi rate is expected to be retained at a record
low zero percent and the deposit rate at -0.40 percent.
In the New York session, Canada new housing price index for
October, U.S. weekly jobless claims for the week ended December 9,
business inventories for October, retail sales and import and
export prices for November are slated for release.
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