Pound Slides After Weaker-than-expected Retail Sales
April 21 2017 - 1:14AM
RTTF2
The pound dropped against its major rivals in the early European
session on Friday, as data showed that UK retail sales declined
more than expected in March.
Figures from the Office for National Statistics revealed that
retail sales including automotive fuel decreased 1.8 percent
month-on-month in March, reversing a 1.7 percent rise in February.
Sales were forecast to fall moderately by 0.5 percent.
Excluding auto fuel, retail sales volume declined 1.5 percent,
in contrast to a 1.6 percent rise a month ago and bigger than the
expected 0.5 percent drop.
On a yearly basis, growth in retail sales volume eased
more-than-expected to 1.7 percent from 3.7 percent. Economists had
forecast a 3.3 percent increase.
Excluding auto fuel, retail sales grew 2.6 percent, slower than
February's 4.1 percent increase and the expected 3.8 percent.
In other economic news, survey figures from IHS Markit and
Knight Frank showed that British households perceived that the
value of their homes increased further in April, though the rate of
growth eased fractionally.
The Knight Frank/Markit House Price Sentiment Index, or HPSI,
dropped to 57.4 in April from 57.5 in March. However, any reading
above 50 indicates rise in house prices.
European shares are trading mixed, with investors keeping an eye
on developments in France ahead of the start of the French
presidential election. It is still unclear which two of the four
top candidates will qualify for the final election on May 7, while
a Harris Interactive poll signaled a win for centrist Emmanuel
Macron in Sunday's first-round presidential election, helping boost
market confidence.
The pound held steady against its major rivals in the Asian
session.
The pound dropped to 0.8386 against the euro, from a 2-day high
of 0.8354 hit at 4:00 am ET. The next possible support for the
pound is seen around the 0.85 zone.
Survey results from IHS Markit showed that Eurozone private
sector growth hit a fresh six-year high in April.
The flash composite output index rose unexpectedly to 56.7 in
April from 56.4 in March. The latest reading was the highest since
April 2011. Economists had forecast the score to remain unchanged
at 56.4.
The pound, having advanced to 1.2834 against the dollar at 4:00
am ET, reversed direction with the pair trading at 1.2781.
Continuation of the pound's downtrend may see it challenging
support around the 1.26 region.
Reversing from an early high of 140.15 against the Japanese yen,
the pound declined to 139.45. If the pound extends decline, 137.5
is possibly seen as its next support level.
Figures from the Ministry of Economy, Trade and Industry showed
that Japan's tertiary activity index increased at a
slower-than-expected pace in February, after falling in the
previous two months.
The tertiary activity index rose 0.2 percent month-over-month in
February, reversing a 0.2 percent drop in January. Economists had
expected a 0.3 percent climb for the month.
The pound edged down to 1.2755 against the Swiss franc,
following a 2-day advance to 1.2804 at 4:00 am ET. The pound is
seen finding support around the 1.26 mark.
Looking ahead, at 7:45 am ET, the Bank of England member Michael
Saunders speaks at the Federation of Small businesses in
London.
In the New York session, Canada consumer prices for March,
Markit's U.S. manufacturing PMI for April and U.S. existing home
sales for March are set for release.
At 9:30 am ET, Minneapolis Fed President Neel Kashkari speaks at
the Community Economic Development Symposium, in St. Paul.
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