By Grace Smyth
This past week has been a fairly positive one for Pound Sterling which has seen some nice improvement against its major pairings. The sterling push back has been guided by Tuesday’s average wage growth data release which recorded a wage growth rise in July. This coupled with Wednesday’s better than expected inflation figure had given Sterling further support in the week. Although inflation is beginning to drop there is still a long way to go before it reaches the government’s 2% target and therefore commentary from members of the MPC is still very much leaning towards further interest rates rises for the remainder of the year.
So far, the Pound has been the top-performing currency of the week among the major currencies, providing excellent buying opportunities for those with Sterling in hand looking to sell. But can it continue to hold its position? Closing out the trading week with the release of UK Retail Sales first thing this morning which declined 1.2% on a monthly basis in July. A steeper fall than expected as markets were predicting only a 0.5% contraction from the 0.6% recorded in June. Likely down to the the wet weather we have been experiencing with a higher proportion of spending occurring online, rather than being down to higher inflation. Retail sales figures are important as household consumption is the largest expenditure across the UK economy as plays a big part in the direction of currency as well as future plans by the MPC and the Bank of England. The Pound dropped initially following the release. Also this morning we the Eurozone post HICP Consumer Prices, another event worth checking in on as this contribute towards Inflation measures. We enter the afternoon’s trading with little data to note.
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