Sterling Gets Boost from Brexit News, Strong Retail Sales

The Great Britain pound was one of the strongest currencies today, gaining on most of its major rivals, though failing to gain on the extremely strong Australian dollar and almost erasing gains versus the New Zealand dollar. The factors supporting the currency were a reduced chance of a no-deal Brexit and a surprisingly good retail sales report.
Investors were concerned that Boris Johnson, the most likely candidate for the seat of the prime minister, may push for a no-deal Brexit. But such concerns eased after the Parliament approved an amendment that will make it harder for the government to force a hard Brexit.
Adding to the positive news, EU chief Brexit negotiator Michel Barnier signaled that he is open to alternative proposals regarding the Irish border — the main sticking point in the Brexit negotiations. Previously, EU officials were saying that they are not going to renegotiate the Irish backstop.
Britain’s Office for National Statistics reported that retail sales rose 1.0% in June compared with May. That was a total surprise to market participants who were anticipating a drop of 0.3%.
The ONS released the Consumer Price Index yesterday. The report showed that the CPI rose 2.0% in June, year-on-year, the same as in May and in line with forecasts.
GBP/USD surged from 1.2430 to 1.2530 as of 18:46 GMT today. EUR/GBP declined from 0.9026 to 0.8992. GBP/AUD was down from 1.7730 to 1.7670 intraday, though currently, the currency pair is trading near the opening level at about 1.7728.

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