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Pound exchange rates stumble on disappointing retail sales figures, Growing Brexit Uncertainty

currency-newsPound exchange rates stumble on disappointing retail sales figures, Growing Brexit Uncertainty
Pound exchange rates stumble on disappointing retail sales figures, Growing Brexit Uncertainty

The pound stumbled in trade on Thursday, with the UK currency coming under fire following some weak retail sales figures on top of some fresh Brexit anxiety.

Sterling remains on the defensive this morning as well, with GBP/EUR treading water at €1.1379, GBP/USD muted at $1.3017, with both GBP/CAD and GBP/AUD subdued at C$1.7002 and AU$1.8317 respectively, while GBP/NZD slides to NZ$1.9835.

Looking ahead, attention may turn to the Bank of England today as GBP investors look for any signs that the recent upswing in UK wage growth will have led to a more hawkish outlook from Governor Mark Carney.

What’s been happening?                    
                                  

The pound traded lower on Thursday, slipping against the majority of its peers in the wake of some weaker-than-expected UK retail sales and renewed Brexit uncertainty.

Sterling sentiment remained subdued as the ONS reported that domestic retail sales growth plummeted from 0.4% to -0.8% in September, the largest monthly contraction since March.

Applying further pressure to GBP exchange rates throughout the afternoon was confirmation that EU leaders would not be meeting for an emergency Brexit summit in November, stating they did not believe enough progress had been made in discussions with the UK.

Any potential slide in the GBP/EUR exchange rate was also prevented by a softer euro, with markets remaining wary of the single currency as Eurozone officials on the side lines of the EU summit expressed concerns Italy’s budget proposals could undermine the stability of the Eurozone.

Meanwhile the GBP/USD exchange rate struck a new two-week low on Thursday as the US dollar remained buoyed by the hawkish minutes from the Federal Reserve as well as demand for safe-havens.

What’s coming up?

Barring any major Brexit developments any notable movement in the pound is likely to come as a result of a speech by Bank of England Governor Mark Carney later this afternoon.

Following on from the recent jump in UK wage growth, GBP investors are likely to pore over Carney’s remarks for any signs that this could lead to a more hawkish outlook from the BoE moving forward.

Meanwhile the US dollar may look to extend its gain this afternoon should an upbeat speech from the Fed’s Robert Kaplan further bolster Fed rate expectations.

Finally a lull in Eurozone data may limit movement in the euro today, potentially leaving the single currency open to additional losses if markets remain focused on Italy’s debt saga.
 
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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