The pound has gained ground after stronger retail sales figures and a vote to help mitigate the chance of a no-deal Brexit. Elsewhere, crude prices have continued their declines, despite the geopolitical risks that come with the Iranian seizure of a foreign tanker in the Straits of Hormuz.

  • UK retail sales beat helps push pound higher
  • Parliament vote helps lessen chance of no-deal Brexit
  • Crude prices tumble despite the Iranian seizure of a ‘foreign tanker’

Gains for the pound have come at the expense of UK stocks today, with the FTSE 100 hitting a July-low in early trade today. The biggest loser was Fresnillo, with the gold producer seeing production tumble despite recently hitting six-year highs. Meanwhile, the declines seen throughout European markets has seen an increased demand for defensive stocks, pushing the likes of British American Tobacco and Imperial Brands upwards. 

A surprise jump in UK retail sales sent the pound surging, with June retail sales averting fears of a long-standing slump in consumer spending after May retail sales came in at the lowest level in more than a year. However, while the retail sector may be breathing a sigh of relief, much of the increase in sales comes for second-hand goods, while high street brands are also relying heavily on discounted products with lower margins.

The upside seen in the pound was intensified by the prospect of a lessened chance of a no-deal Brexit, after MPs voted for a proposal which will make it difficult for the next PM to bypass Parliament in a bid to enact a no-deal Brexit in October. The trajectory of the pound has been closely tied to the chances of a no-deal Brexit, and thus today’s gains prove markets see this as a key step in staving such an event.

Crude prices have shrugged off today’s Iranian seizure of a foreign tanker, with markets instead focusing in on yesterday’s US inventories data. While such geopolitical tension would ordinarily bring a sharp rise in oil prices, we are instead seeing a bout of selling for crude. Ultimately markets are focusing in on US production, and the smaller than expected inventories drawdown yesterday could hint at an end to the trend of shrinking stocks over recent weeks. 

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD rising after upbeat German PMI data

EUR/USD is trading around 1.1100, up on the day. German manufacturing PMI surprised with 43.6 and other figures also beat expectations. The ECB minutes are next.


GBP/USD stabilizing above 1.2100 ahead of the Johnson-Macron meeting

GBP/USD is trading above 1.2100, steady. After German Chancellor Merkel offered UK PM Johnson 30 days to solve the Irish Backstop problem, Johnson meets French President Macron.


USD/JPY: Weaker below 106.50, focus on T-yields ahead of Powell

USD/JPY trades weaker below the 106.50 level, tracking the negative S&P 500 futures and a cautious sentiment on the Asian equities, as attention shifts from the FOMC minutes to the Fed's Powell speech for fresh direction. 


USD/CNH: Rallies, confirms falling channel breakout

Another wave of CNH selling could soon hit the market as the pair technical charts are reporting a bullish breakout. For instance, the pair has jumped 0.22% to levels above 7.08 today, confirming an upside break of the falling channel on the 4H chart.

Read more

Gold: Trapped in a symmetrical triangle

Gold is trapped in a narrowing price or a symmetrical triangle pattern, according to the 4-hour chart. The yellow metal rose to a six-year high of $1,353 per Oz on Aug. 13 and has charted lower highs and higher lows ever since.

Gold News