Pound Extends Decline As U.K. Retail Sales Fall Unexpectedly
April 23 2015 - 4:13AM
RTTF2
The pound extended slide against its major counterparts on
Thursday's European deals, following data showing an unexpected
decline in nation's retail sales in March, due to a fall in
non-food store sales.
Data from the Office for National Statistics showed that retail
sales including auto fuel dropped 0.5 percent on a monthly basis in
March, reversing a 0.6 percent rise in February. This was the first
fall in six months. Economists had forecast a 0.4 percent rise for
March.
Excluding auto fuel, sales advanced 0.2 percent from prior
month, slower than February's 0.6 percent increase and the expected
growth of 0.5 percent.
On a yearly basis, retail sales including auto fuel expanded 4.2
percent after rising 5.4 percent in February. Sales were expected
to grow again 5.4 percent.
Separate data showed that public sector net borrowing excluding
interventions decreased by GBP 0.4 billion from last year to GBP
7.4 billion in March. The expected level was GBP 7 billion.
European stocks are trading in a negative territory, after a
private survey of Eurozone manufacturing and service sector
activity came in weaker than forecast in April.
The pound advanced sharply yesterday, after the Bank of
England's minutes of April meeting showed that U.K. inflation might
pick up at a faster pace by the end of year. This spurred
speculation that the bank's next move will be a rate hike, as
hinted by BoE governor Mark Carney. Yesterday, the pound rose by
0.72 percent against the greenback, 0.92 percent against the yen,
0.82 percent against the euro and 2.48 percent against the
franc.
The pound was lower against the franc, yen and the greenback in
the Asian session.
In European trading, the pound edged down to 0.7162 against the
euro, reversing from an early more than a 5-week high of 0.7116 hit
at 3:00 am ET. The pound may possibly find support around the 0.73
zone.
The pound reversed from an early high of 1.5039 versus the
greenback and more than a 5-week high of 180.44 versus the yen,
edging down to 1.4959 and 179.30, respectively. At Wednesday's
close, the pound was valued at 1.5033 against the greenback and
180.26 versus the yen. On the downside, the pound is likely to find
support around 1.48 against the greenback and 178.4 against the
yen.
The pound, which advanced to 1.4605 against the franc in early
deals, dropped to 1.4467 after the data. Next key support for the
pound may be located around the 1.425 level.
Looking ahead, U.S. weekly jobless claims for the week ended
April 18, Markit's manufacturing PMI for April and new home sales
data for March are set to be published in the New York session.
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