Retail sales dropped in May for the first time in three months, a fact that was not predicted by analysts, weighing negatively on the pound outlook for this Thursday making it to lose ground against the greenback and the euro.
The United Kingdoms Office for National Statistics affirmed that retail sales fell by 0.6 percent, the first fall in three months, since signs of economic recovery started to slightly appear in the British currently weakened economy. Virtually all main currencies strengthened against the pound, the Swiss franc had most significant gains as the nations central bank may let the currency fluctuate to higher levels against the euro and the British currency. The pound has been hit by multiple negative economic and political news during the month of June, and the rally it signaled to start against the U.S. dollar was quickly stopped as data and speculations didnt provide support for the pound to continue its climb.
The reversed movement on the British retail sales was really disappointing to the already vulnerable outlook for the British pound. Analysts were very confident that this data would continue to climb, reassuring that hopes for a quick economic rebound in the U.K. would follow, by since the market is now confused about the world economic direction, risk aversion tends to increase.
EUR/GBP climbed to 0.8570 as of 12:07 GMT from a previous rate of 0.8515. GBP/USD remained stable in the intraday comparison, after a spike followed by a fall after the disappointing sales data.
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