Currency Note Sterling

Strong retail sales buoy sterling

By Smart Currency August 16th, 2013

Sterling’s week started fairly muted, with little being released in the way of influential data. We did see the release of Consumer Price Index data, which is a key indicator of inflation levels, but that came out largely as expected, prompting little market reaction. Sterling was more buoyant towards the end of the week, reaching a two month high against the US dollar, and a six week high against the euro following five consecutive days of gains against the multi-nation currency. This was sparked initially by the release of the minutes and voting patterns of the Monetary Policy Committee meeting of last week. These showed unanimous support of keeping interest rates at current levels, and 8-1 split in favour of the forward guidance given. The lone dissenter broadly agreed with the proposal, but backed a shorter time frame for the inflation knock out clause. All of this, alongside a better than expected fall in the number of unemployment claims, was positive news for the strength of sterling, and was duly reflected in the rates. Finally, yesterday saw retail sales also come out stronger than anticipated, leading to sterling hitting the described highs. This concluded the data for the week, with none due out today. Call your trader now for the latest price on sterling as it rounds off a strong week.