Pound Strengthens As U.K. Retail Sales Growth Beats Forecasts
June 14 2018 - 1:56AM
RTTF2
The pound advanced against its major counterparts in early
European deals on Thursday, after a data showed that U.K. retail
sales growth accelerated more than expected in May.
Data from the Office for National Statistics showed that retail
sales volume including auto fuel, grew 1.3 percent month-on-month,
following April's 1.8 percent increase. This was the second
consecutive rise in sales and much bigger than the expected 0.5
percent.
Sales excluding auto fuel, climbed 1.3 percent versus 1.4
percent increase a month ago. Sales were expected to gain 0.3
percent.
Annually, overall retail sales growth advanced to 3.9 percent in
May from 1.4 percent in April. Sales were forecast to climb 2.4
percent.
Similarly, excluding auto fuel, retail sales increased 4.4
percent after expanding 1.4 percent a month ago. This was also
faster than the expected 2.5 percent.
Data from the Royal Institution of Chartered Surveyors showed
that U.K. house price balance improved more than expected in May.
The house price balance rose to -3 percent from -7 percent in
April. The expected level was -5 percent
Meanwhile, European shares fell after the US Fed stuck a hawkish
tone by projecting a faster pace of rate hikes this year and
investors awaited the ECB rate decision for a clear signal on
whether the central bank will end the bond buying program by the
end of the year.
The currency showed mixed trading against its major counterparts
in the Asian session. While it rose against the greenback and the
franc, it held steady against the euro. Against the yen, it
fell.
The pound rallied to a 3-day high of 1.3440 against the
greenback and a 2-day high of 1.3212 against the franc, reversing
from its early lows of 1.3370 and 1.3163, respectively. If the
pound rises further, it may find resistance around 1.36 against the
greenback and 1.35 against the franc.
The pound reversed from its early lows of 147.25 against the yen
and 0.8821 against the euro, rising to 147.84 and 0.8795,
respectively. On the upside, 150.00 and 0.86 are possibly seen as
the next resistance levels for the pound against the yen and the
euro, respectively.
Looking ahead, at 7:45 am ET, the European Central Bank
announces its decision on interest rates. Economists expect the
bank to keep its main refi rate at a record low of zero
percent.
In the New York session, Canada new housing price index for
April, U.S. retail sales and import and export prices for May,
weekly jobless claims for the week ended June 9 and business
inventories for April are scheduled for release.
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