Early this morning, UK retail figures exploded across the data headlines, doubling and even tripling expectations in the month of July. The rebound not only pushed retail sales up from the Coronavirus dip bottoms recorded last month, but up and beyond February’s pre-Covid numbers, with online sale in particular showing robust growth of 50.4% – a clear sign of how retail acceleration towards digitisation is well underway. Sterling welcomed the news with both hands, finally pushing itself out of its sideways channel on GBP/EUR, notching a not to be sniffed at 1.40%, whilst also recovering all of the losses against USD from earlier in the week, sitting above the 1.32 neckline this morning. To make things even better, a stronger than expected services figure went hand in hand with the retail data to give the pound a terrific chance of ending the week in a strong position – the Government’s “Eat out to help out” is being heralded as the key reason for the uptick.
Despite all the euphoria; one thing to potentially take the wind from sterling’s sails this morning, was this morning’s announcement that the EU’s Brexit team is due to give a speech this morning at 10am. The fact the statement was not scheduled has left many in the market totally unprepared, with GBP buyers now stuck in two minds, run with the data to push sterling higher? Or cash our before a presumed more of the same doom and gloom press conference on Brexit?
Stick or twist?
Have a great weekend.
Author: Joshua Haden-Jones, Senior Relationship Manager
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