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Forex - Sterling hits 1-month lows after U.K. retail sales report

Published 07/24/2014, 05:05 AM
Updated 07/24/2014, 05:05 AM
Pound touches session lows after UK retail sales report

Pound touches session lows after UK retail sales report

Investing.com - The pound fell to one month lows against the dollar on Thursday after official data showed that U.K. retail sales rose less than expected in June.

GBP/USD was down 0.18% to 1.7014, the lowest since June 26, from around 1.7040 ahead of the data.

Cable was likely to find support at around the 1.70 level and resistance at 1.7052 the session high.

The drop in the pound came after the Office for National Statistics said retail sales rose just 0.1% in June from a month earlier, falling short of expectations for a 0.3% increase.

On a year-over-year basis, retail sales rose 3.6% in June, below expectations for a 3.9% gain, after rising at an annual rate of 3.7% in May.

In the three months to June, retail sales rose 4.5% year-over-year. It was the fastest quarterly increase in 10 years, the ONS said, indicating that the U.K.’s consumer driven recovery is continuing.

The pound rallied to six-year highs against the dollar earlier this month amid growing expectations that the deepening economic recovery in the U.K. will prompt the Bank of England to hike rates before the end of the year.

But the dollar was boosted after Federal Reserve Chair Janet Yellen indicated late week that rates could rose sooner if the recovery in the U.S. labor market continues.

The pound was also lower against the euro, with EUR/GBP rising 0.28% to 0.7922, pulling back from Wednesday’s 22 month lows of 0.7873.

The euro found support after private sector data on Thursday indicated the economic growth in the euro zone rebounded in July.

The preliminary reading of the euro zone manufacturing purchasing managers’ index rose to a two-month high of 51.9 from 51.8 in June.

The bloc’s services PMI jumped to a 38-month high of 54.4 from 52.8 in June.

Latest comments

"In June 2014, the amount spent in the retail industry increased by 3.5% compared with June 2013 and by 0.8% compared with May 2014" - but of course those are terrible data which impacted negatievely UK currency :) ... Funny isn't it?
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