Dukascopy Bank Team
Dukascopy Bank SA
GBP/USD: UK Retail Sales
The Sterling strengthened significantly against the US Dollar, as all the main components of the UK retail sales report showed better-than-expected figures for August. After the release, the GBP/USD jumped by 0.67% or 91 base point to touch the daily high of 1.3606 However, by the next couple of hours the pair resumed trading in a weaker area between the 1.3525 and 1.3560 marks.
The Office for National Statistics reported that both Britain’s retail sales and core retail sales rose 1.0% in August, beating expectations for a 0.2% rise and ignoring rising prices brought by post-referendum weakness of the Sterling. Therefore, strong figures are likely to boost expectations for the Bank of England’s rate hike announcement in November.
EUR/USD: Fed Interest Rate Decision
The Euro fell sharply against its American counterpart, following the Fed’s announcement of its interest rate decision on Wednesday. The Euro dropped against the US Dollar by 0.91% or 109 base points to the 1.1903 mark, entering the area close the weekly low.
The two-day meeting of the Fed resulted in an overall agreement to keep interest rates unchanged at 1.25%, as widely anticipated. Despite lowered inflation forecasts, the FOMC still forecasted one more rate increase by the end of 2017 to sustain the US economic growth. The Central Bank also noted that it will start unwinding its balance sheet in October, while the market wanted it to wait and see how September’s hurricanes affected the economy.
This overview can be used only for informational purposes. Dukascopy SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.
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