May Takes Control of Brexit Talks, Pound Retreats After Initial Rally

The Great Britain pound rallied today on the news that Prime Minister Theresa May will take matters of the Brexit talks with the European Union in her own hands. But the currency was unable to hold onto gains, giving up most of them by now.
May said yesterday that her office will control the Brexit negotiations instead of a dedicated Brexit ministry. Markets welcomed the news as it likely means more unified approach and speedier results. Consequently, bets on an interest rate hike from the Bank of England in August climbed to 86%.
As for today’s macroeconomic releases, Confederation of British Industry reported in its Distributive Trade Survey that the net balance of realized retail sales was at +20% in July. That was above the average forecast of +16%, but below the June’s value of +32%. The report was not particularly optimistic, though, saying:

The outlook for the coming month is less upbeat, with retailers expecting sales volumes and orders to flatten out.

GBP/USD ticked up from 1.3141 to 1.3154 as of 11:08 GMT today, though retreated from the daily high of 1.3174. EUR/GBP traded at 0.8889, close to the opening level of 0.8888, after falling to the daily low of 0.8871. GBP/JPY also retreated, trading close to the opening of 146.11, following the rally to 146.50.

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