According to analysts at BBH, sterling is resisting the stronger dollar tone as the slightly stronger than expected UK retail sales report helped blunt the negative impact from the political developments.
Key Quotes
“A media report claims the EU has ruled out a bespoke trade deal with the UK (like the recently agreed Canadian free-trade agreement). October retail sales rose 0.1%, excluding auto fuel and 0.3% with it. Both measures were 0.1% above the Bloomberg survey median forecast, and the September decline was also pared by 0.1%. Still, the year-over-year pace has turned negative for the first time in four years. A separate report indicated that the demand for autos fell for the seventh month in October.”
“Sterling remains stuck in a trading range that had been carved last month between roughly $1.30 and $1.3320. Since the start of November, it has not managed to move much above $1.3230. Cross-rate adjustments may be helping sterling. As the euro posted a shooting star candlestick against the dollar yesterday, it did the same against sterling. The euro's push above GBP0.9000 proved premature, and it has been set back toward GBP0.8920 today. Support is seen in the GBP0.8875-GBP0.8900.”
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