Pound Slides on Unexpected Negative Data

The United Kingdom’s Office for National Statistics affirmed that retail sales fell by 0.6 percent, the first fall in three months, since signs of economic recovery started to slightly appear in the British currently weakened economy. Virtually all main currencies strengthened against the pound, the Swiss franc had most significant gains as the nation’s central bank may let the currency fluctuate to higher levels against the euro and the British currency. The pound has been hit by multiple negative economic and political news during the month of June, and the rally it signaled to start against the U.S. dollar was quickly stopped as data and speculations didn’t provide support for the pound to continue its climb.

The reversed movement on the British retail sales was really disappointing to the already vulnerable outlook for the British pound. Analysts were very confident that this data would continue to climb, reassuring that hopes for a quick economic rebound in the U.K. would follow, by since the market is now confused about the world economic direction, risk aversion tends to increase.

EUR/GBP climbed to 0.8570 as of 12:07 GMT from a previous rate of 0.8515. GBP/USD remained stable in the intraday comparison, after a spike followed by a fall after the disappointing sales data.

If you want to comment on the Great Britain pound’s recent action or have any questions regarding this currency, please, feel free to reply below.

This entry was posted on Thursday, June 18th, 2009 at 1:14 pm and is filed under Great Britain Pound. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.