UK: Strong retail sales report lifts sterling back toward $1.36 - BBH
Strong UK retail sales report and anticipation of May's speech at the end of the week has lifted sterling back toward $1.36, explains the analysis team at BBH.
Key Quotes
“The recent peak was near $1.3620. It had found a bid a little below $1.35. The Financial Times reports that May will offer to pay into the EU budget through 2020, at a cost of about GBP20 bln. This reportedly will be discussed in a cabinet meeting ahead of May's speech in Florence on Friday.”
“Retail sales jumped 1% in August, with and without petrol, and the July figures were revised higher. There is some suggestion that foreign consumers may have flattered the sales by taking advantage of the weak sterling to buy jewelry and watches. Sales of clothing, footwear, and household goods were softer. Regardless of the details, the optics have fanned rate hike expectations and the implied yield of the December short-sterling futures contract has edged higher to its best level since February.”
Author
Sandeep Kanihama
FXStreet Contributor
Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.
