GBP took a knock yesterday following news that retail sales for last month slumped, according to the British Retail Consortium, which is suspected as a result of shoppers anticipating, and waiting for, the so-called ‘Black Friday’ sale at the end of this month. Despite this, Xmas sales for this year are expected to be good so all may not be lost just yet. This didn’t mean the pound had a completely dire day yesterday as we saw it hit 1.5145 against the dollar, and 1.4148 versus the single currency.
We’ll now look to today’s unemployment data from the UK which is expected to come in at 5.4%. We have seen an improvement in average earnings recently, and the BoE’s inflation report showed that the UK’s labour market is looking robust at the moment. If there is a shift into negative territory then there will, most likely, be a dip in GBP’s value.
Tuesday saw the euro/dollar hit the worst level since April after we saw positive unemployment data out of the US and further speculation that there will be more QE seen in Europe. In Greece, where Monday marked some concern over how the Greeks are going to meet the requirements for their next bailout tranche, there was further consternation as the European Stability Mechanism was seen to say that no form of debt relief was on the card for the much-trouble country; this, in a bid to encourage avoiding debt relief measures as other countries have done in finding solutions to the monetary issues that have afflicted the troubled Mediterranean nation.
There isn’t too much out in terms of data today for Europe, but we will see Mario Draghi speak at the annual Mansion House get-together.
It’s been a quiet week so far for the States, in terms of data, so USD strength has been swung around by events and news from elsewhere. It’s been tight trading for the dollar against the pound, while things against the euro have been a bit more interesting as we saw the pair close back about 1.0700 yesterday COP.
With it being a public holiday in the States today, we’ll see little data aside from MBO mortgage applications (of little bearing). Friday should offer some market movement when we see the release of retail sales data.
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