The Great Britain pound was soft today, erasing its earlier gains versus commodity currencies. The reason for the currency’s underwhelming performance was a worse-than-expected retail sales report. But the sterling did not perform particularly poorly despite the rather negative data and even managed to hold gains against a number of currencies, including the euro and the Swiss franc.
Britain’s Office for National Statistics reported that retail sales slumped by 5.1% in March, exceeding the consensus forecast of a 4.5% drop. It was a sharp increase in the rate of decline compared with February’s 0.3%. In fact, it was the sharpest drop in the history of the survey. Unsurprisingly, the perpetrator behind the collapse of sales was the COVID-19 pandemic, which resulted in the closure of a huge amount of shops from March 23, when lockdown measures had started.
GfK Consumer Confidence remained stable at -34 in April. Joe Staton, Client Strategy Director, commented:
Consumer Confidence has stayed steady at the minus -34 points recorded in our first COVID-19 flash of April 6th. It is too early to say whether this has now stabilised after weeks of adjustment to the reality of lockdown life, or whether further falls are to come.
He added further:
Overall, there is no guarantee yet that the fall in consumer confidence has ended, and we are only five points away from the record -39 low seen in July 2008.
Meanwhile, UK Health Minister Matt Hancock said today that it is too soon to change the lockdown measures.
GBP/USD slipped from 1.2343 to 1.2324 as of 7:55 GMT today. EUR/GBP traded at 0.8722 after opening at 0.8729. GBP/CHF edged up from 1.2044 to 1.2060, bouncing from the session low of 1.2023.
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