- Jeremy Cook, chief economist at currency brokers World First
The cable refuse to move above 1.69-mark and perform another impressive rally. Moreover, investors are constantly making gloomy forecasts about each piece of fundamental data, citing the slowdown in the first half of this year. The economy, however, showed its solid footing once again, with retail sales surprising markets to the upside, providing a strong bullish bias for the Sterling. The Pound advanced 0.10% versus the greenback after the release of the data, with the pair rising to 1.6815.
Consumer spending accounts for a majority of economic activity in all major developed economies. Britain is not an exception. The ONS said retail sales in the U.K. climbed 0.1% in March from February when they picked up 1.3%. On a yearly basis sales advanced 4.2% accelerating from 3.3% a month earlier. Furthermore, core retail sales surprised markets to the upside on a monthly basis, posting a smaller loss. Volume rose 4.2% in March from a year ago, while the cold weather was the main reason for a year-on-year increase. The report also showed non-food stores registered the biggest jump since April 2002, up by 9.6%, making a large contribution to the overall reading. Consumers led the last year's recovery and it seems that they are set to bolster growth again this year, as wage growth reached the pace of consumer prices, easing the pressure on the nation's households.
© Dukascopy Bank SA