Pound Rallies After Upbeat Retail Sales

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GBP/USD 1 Week Chart

The Pound (GBP) strengthened against most of its peers yesterday as markets reacted positively to the UK’s latest retail sales data.

The ONS reported that sales leapt from -0.5% to 1.4% in February, sailing past initial expectations of 0.4% growth and suggesting consumers were still willing to spend despite rising inflation.

However, Sterling softened overnight against some of the majors as economists warned that first quarter growth would still be negatively affected by lacklustre sales at the start of the year.


The Pound Euro (EUR) exchange rate fell from a three-week high overnight as investors began to sour on the UK’s retail data.

The single currency was further bolstered this morning by the release of flash PMIs for March, which were expected to show activity in France, Germany and the Eurozone slowed marginally. However, the indices all rose, showing a six-year high for quarterly private sector growth in the currency bloc’s two largest economies.

US Dollar

Sterling surrendered almost all of Thursday’s gains against the US Dollar (USD) earlier this morning in a delayed reaction to an impressive rise in US New Home Sales.

Data shows that 592,000 new homes were sold on the US housing market in February, up from 558,000 the month before, with sales growth of 6.1% easily outpacing initial forecasts of a 0.7% rise.

However USD investors are frozen once again today as they await to see if President Donald Trump can pass his new healthcare bill after the vote was postponed yesterday. Should the legislation fail to pass, the ‘Greenback’ will likely fall as markets fear it would bode ill for Trump’s future tax and spending bills.

Canadian Dollar

The Pound Canadian Dollar (CAD) exchange rate reached a new three-month high on Thursday on the back of impressive UK retail sales, although the pairing began to dip again in the evening.

The ‘Loonie’ may advance further this afternoon if Canada’s latest CPI data reports that inflation continued to tear higher in February, but this is unlikely given that forecasts are for annual price growth to remain at 2.1% and monthly growth to drop from 0.9% to 0.2%.

Australian Dollar

Sterling was able to solidify its gains against the Australian Dollar (AUD) yesterday as, despite iron ore prices beginning to bounce back, market sentiment continued to sour against the ‘Aussie’.

New Zealand Dollar

The Pound found little resistance from the New Zealand Dollar overnight on Thursday as an underwhelming domestic trade balance undermined the ‘Kiwi’. The latest figures were expected to show that the trade balance swelled from a quarter-of-a-billion NZD deficit to a surplus of NS$180 million. However, the shortfall only narrowed to -NS$18 million.


Further Reading


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Posted to: News

Please note that the opinions of our authors are their own and do not reflect the opinion of Best Exchange Rates and should not be taken as a reference to buy or sell any financial product.

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