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Strong retail sales bolster the pound

24th March 2017 Market Update

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🇬🇧 GBP – The pound found support and made gains across the board, as retails sales surprised to the upside and beat all estimates early in the morning. The gains were slightly muted, as markets are likely holding out for Article 50 to be raised next week. As such, this shows that there are still some reservations as to how this will impact the UK’s economy and the pound as a result.

Today we have no data out from the UK, which may see the pound lose some ground it made yesterday.

🇪🇺 EUR – Consumer confidence made a huge comeback from the dismal -6.2 reading last month to a positive 5.0 for March, however this had limited impact on the single currency.

Markets will look to the manufacturing and services figures this morning, which have come in better than expected across the board and seen the euro strengthen slightly.

🇺🇸 USD – US New Home sales beat expectations yesterday afternoon, but had little impact on the market. US Stock markets fell back slightly, as yesterday’s vote in the US House of Representatives on the new American Health Care Act brought in by Donald Trump to replace “Obamacare” was postponed.

This afternoon, durable goods orders for February will be looked at closely, as this generally represents the purchase of goods that are planned to last more than three years and as these purchases often involve large investments, they are sensitive to the US economic situation.

 

Key Announcements

🇪🇺 EUR
9.00am: Manufacturing and Services PMI. Both beating expectations this morning.

🇨🇦 CAD
12.30pm: Inflation data for February, expected to be unchanged.

🇺🇸 USD
12.30pm: Durable goods orders. Expected to show a slight decline from 2.0% to 1.2%.

 

Our View:The lack of movement in the pound following yesterday’s strong Retail Sales results shows that whilst the pound has room to improve, the gains may still be limited, as markets shy from backing sterling ahead of the raising of Article 50 next week.

 

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Darren Kilner

Darren Kilner

Darren is Head of Dealing at FairFX. Darren lives and breaths FX, his Mastermind topics are G8 currencies and economic forecasts.

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