December’s retail sales data has disappointed expectations, encouraging a sell-off in the Pound Sterling throughout today’s trading session. Snapping a near-perfect week of gains for the domestic currency, the Pound traded at times on half of one percent weaker on an intraday basis. The headline figure of house hold goods was down some 2.3% with sales for the period of Q4 registering a 0.2% fall. From a technical perspective it is arguable that the Pound was due a correction following sharp appreciation based upon fundamental changes to the macroeconomic environment. However, it is largely undisputed that the damning picture painted by the data has generated a gradual headwind to today’s trade. The FTSE100 has rallied admirably today in the face of a weaker Pound Sterling despite the underwhelming retail performance. British Prime Minister Theresa May has a challenging weekend ahead of her before she presents her plan, or rather plans, ‘B’. Voting will not be held on May’s alternatives before the 29th January, however, make no mistake, financial positioning in the foreign exchange markets will be virtually instant as participants express their feeling about the permissibility and productivity of plans at the time of unveiling. May has held conversations with her European counterparts with limited reported concession building taking place, leaving Sterling unable to secure another winning day.
Discussion and Analysis by Charles Porter
Click Here to Subscribe to the SGM-FX Newsletter
Opportunity for a weaker Dollar The passing of month-end allows markets an opportunity to reassess currency valuations. Despite a cooling off within the Dollar as forecasted following the agreement between the White House and Kevin McCarthy, month end flows yesterday showed favourable conditions for a short-term Dollar resurgence. The beginning of June coincided with headlines […]
Turkish Lira While President Erdogan removed the uncertainty overhanging the Turkish market by winning the election in the run off over the weekend, the news served to cement the certainty that nothing much was likely to change with respect to Turkish economic policy or indeed the subservient role of the Central Bank of Turkey to […]
Did EURUSD miss the news? Over the weekend, the President and the Speaker of the House of Representatives reached a much-awaited deal on the US debt ceiling. The impending constraint on debt could have forced the shutdown of government departments and precluded the US government from servicing costs and existing debts, triggering a default. The […]