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Shock UK retail sales slump dents pound

business-articlesShock UK retail sales slump dents pound
  • Unexpected sales weakness weighs on pound
  • Euro fails to benefit from Eurozone inflation uptick
  • Manufacturing sector contraction drags down New Zealand dollar
Pound drops after slump in UK retail sales
A surprise decline in UK retail sales weighed heavily on the pound ahead of the weekend as the odds of an imminent Bank of England (BoE) interest rate cut rose again.
The -0.8% drop in sales showed that consumer confidence failed to improve in the wake of the general election result, casting fresh doubt over the economic outlook.
Unless domestic sentiment bounces back in the near future the UK looks at risk of experiencing another growth contraction.
If this week’s UK employment data underperforms the pound could come under further pressure.
ECB in the spotlight
Confirmation that the Eurozone consumer price index picked up in December failed to offer the euro a boost on Friday.
Comments from European Central Bank (ECB) President Christine Lagarde could support EUR exchange rates this afternoon, however, if she signals a level of confidence in the Eurozone’s economic outlook.
Investors will also be looking ahead to this week’s ECB interest rate decision.
Service sector strength set to lift New Zealand dollar
NZD exchange rates were undermined last week as December’s New Zealand manufacturing PMI slipped into a state of contraction.
With confidence in the global growth outlook still limited, this latest sign of domestic weakness weighed heavily on the New Zealand dollar.
The mood towards the New Zealand dollar could pick back up this evening, though, if the corresponding services PMI proves more positive.
Another strong month of growth for the service sector would ease fears of a fourth quarter growth contraction, offering NZD exchange rates a rallying point.
Upcoming Data:
Monday, 20th January 2020
18:30 EUR European Central Bank President Lagarde Speech
21:30 NZD Services PMI
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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