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Forex - Sterling dips after U.K. retail sales miss forecasts

Published 10/20/2016, 05:21 AM
Updated 10/20/2016, 05:21 AM
© Reuters.  Sterling slips lower after U.K. retail sales miss forecasts

© Reuters. Sterling slips lower after U.K. retail sales miss forecasts

Investing.com - Sterling edged lower on Thursday after data showing that U.K. retail sales were slightly weaker than expected last month, but consumer sentiment remained firm in the aftermath of the June 23 Brexit vote.

GBP/USD eased to 1.2260 from around 1.2275 ahead of the data.

Retail sales were flat in September the Office for National Statistics said, compared to forecasts for a 0.4% increase.

On an annual basis, retail sales grew 4.1%, which was also weaker than expected.

The ONS said the largest monthly falls in sales were of clothing and footwear as higher prices and warmer September weather hit demand.

August’s figures were revised up to show annual growth of 6.6%, which means that third quarter retail sales were up 5.4%, the strongest growth since August 2014.

The ONS said that the underlying trend in retail sales remained strong, indicating that consumer confidence has remained steady since June’s referendum.

Sterling remained under pressure amid ongoing uncertainty over what form Britain’s exit from the European Union will take.

The pound was lower against the euro, with EUR/GBP rising 0.28% to 0.8953 ahead of the European Central Bank’s policy announcement later in the day.

The ECB was not expected to announce any changes to monetary policy, but could lay the groundwork for additional easing in December as it attempts to spur inflation in the single currency bloc.

ECB President Mario Draghi is likely to reinforce the need for monetary stimulus, amid expectations for an extension of its asset purchase program beyond its scheduled end in March.

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