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Could Italian retail sales slowdown dent euro?

business-articlesCould Italian retail sales slowdown dent euro?
  • Weakening Italian retail sales to drag euro down
  • Pound remains under pressure from Brexit anxiety
  • Strengthening business optimism set to boost US dollar
Italian retail sales decline to dent euro demand
Yesterday’s unexpectedly improved Eurozone Sentix investor confidence index helped to shore up the euro, encouraging optimism in the economic outlook.
However, the mood towards the single currency could sour once again this morning if February’s Italian retail sales slow as forecast.
Investors expect to see sales growth ease to just 0.1% on the year, suggesting that Italian consumers are taking a more cautious outlook in the face of ongoing political jitters.
Unless the data delivers a stronger month of retail sales growth EUR exchange rates may struggle to hold onto a positive footing.
Brexit uncertainty continues to weigh on pound
Anxiety over Brexit looks set to keep the pound under pressure today as markets brace for the UK potentially crashing out of the EU without a deal.
As talks between Theresa May and the Labour leadership continue investors are keen for any signs of progress towards a mutually agreeable deal.
If the two sides appear to approach a satisfactory compromise the appeal of the pound could improve sharply.
Until there is a greater sense of clarity over the UK’s future relationship with the EU, though, GBP exchange rates could struggle to return to a sustainable uptrend.
Improved business optimism to offer US dollar rallying point
As US factory orders contracted on the month in February the US dollar came under renewed pressure, with signs pointing towards a weaker manufacturing sector.
USD exchange rates could find a rallying point this afternoon, however, if March’s NFIB small business optimism index picks up.
A greater sense of confidence among US businesses would give investors fresh incentive to buy into the US dollar, even in the face of recent underwhelming data.
Another downside surprise, though, may drive the US dollar lower across the board today.
Upcoming Data:
Tuesday, 9th April 2019
09:00 EUR Italian Retail Sales
11:00 USD NFIB Small Business Optimism Index
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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