XM Group - Analytics

    XM Group

    603.00 6.50/10
    72% of positive reviews

    Pound tumbles after UK retail sales unexpectedly fall in June

    Retail sales in the UK fell by 0.2% in June from the previous month as food and household goods sales declined during the month. The unexpected fall confounded estimates that sales would rise by 0.4%. The annual rate fell to 4% from 4.7%, against estimates it would rise to 4.8%. On the positive side, May’s figure was revised upwards, with the month-on-month change revised to 0.3% from 0.2%. Excluding fuel, sales were also down by 0.2%.

    On a quarterly basis, retail sales slowed to 0.7% in the three months to June, versus 0.9% in the three months to March. But the underlying trend is expected to remain strong for the rest of the year as consumers benefit from rising wages and historically low inflation.

    The main weakness in June came from household goods such as furniture and appliances, which dropped by 0.9% month-on-month. Food sales were also lower but clothing and footwear was a bright spot, with sales climbing by 0.8% over the month.

    The weak figures reversed the pound’s earlier gains in the day against the dollar. Sterling had climbed to 1.5669 dollars before the data on expectations that they would be in-line with estimates and support the Bank of England’s growing hawkish stance. But the surprise fall in sales dampened any expectations that the Bank of England might act and raise rates before the end of the year as against in early 2016.

    The pound fell as low as 1.5583 against the dollar before recovering to 1.5610. The euro also took advantage of sterling weakness and climbed to 0.7048 in mid-European session. The pound had reached an 8-year high against the single currency in recent days after BoE Governor, Mark Carney, repeatedly hinted that interest rates may have to rise by year end.

    Risk Warning: Forex, Commodities, Options and CFDs (OTC Trading) are leveraged products that carry a substantial risk of loss up to your invested capital and may not be suitable for everyone. Please ensure that you fully understand the risks involved and do not invest money you cannot afford to lose. Please refer to our full Risk Disclosure.

    To leave a comment you must or Join us

    By visiting our website and services, you agree to the conditions of use of cookies. Learn more
    I agree