Given all the encouraging data coming out of the UK over the past few weeks, yesterday’s surprise drop in retail sales came as something of a surprise and the Pound accordingly weakened.
The Pound Sterling to US Dollar Exchange Rate was in the region of 1.6026 as of 11:15 GMT.
After the less-than-impressive report was published the Pound eased away from its eight-month high against the US Dollar and extended recent declines against the Euro.
However, as the day progressed and that celebratory Friday feeling grew, Sterling largely recovered losses against the US Dollar after a report showed that the UK’s budget deficit narrowed last month.
According to figures compiled by the Office for National Statistics, bet borrowing (excluding temporary bank support) was at 13.2 billion Pounds last month, down from 14.4 billion Pounds in August of 2012.
Economists expected the deficit to come in at 13.3 billion Pounds.
Although the data didn’t exactly inspire a wave of market movement, the Pound was able to post modest gains, climbing to 1.6054 against the US Dollar and recovering slightly against the Euro.
1 US Dollar is currently worth 0.6241 pence
GBP/EUR advances were limited ahead of the release of consumer confidence figures for the Eurozone, as investors believe the gauge will show that sentiment in the currency bloc hit an over two-year high.
In response to the Pound’s little upward jaunt currency strategist Ian Stannard asserted; ‘We can extend higher in Sterling in this broad risk-positive environment. However, I would be a bit cautious in the near-term as the move has gone quite a long way. It could be due for a bit of a correction.’
As it stands the Pound is heading for a 5-day gain of 1.1 per cent against the US Dollar. This marks the British currency’s third consecutive weekly advance against its North American rival. Additional GBP/USD movement is likely to be limited before the weekend due to an absence of influential US news.
Influential UK data to focus on next week includes Thursday’s second quarter GDP and Friday’s GFK consumer confidence survey. Economists have forecast that the sentiment gauge climbed from -13 in August to -11 in September.
As always, news from the US and Eurozone will also be of interest.
Current Pound Sterling (GBP) Exchange Rates:
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.6026 <
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1858 >
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.7004 >
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9162 >
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6241 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8433 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5881 <
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5227 >
(As of 10:40 GMT)
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