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UK Asset Declines on Poor Retail Sales, EUR Gains on Easing Greek Tensions and US Dollar Edges Lower ahead of Labour Data

Published: 23 Jul at 1 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, USA, Greece,

Pound Sterling (GBP)
The British Pound softened versus the majority of its closest currency rivals on Thursday. The depreciation is the result of disappointing British retail sales despite expectations that the combination of record-low interest rates, soft consumer prices and accelerated wage growth would cause retail sales to spike. On the year, June’s Retail Sales saw 4.0% growth which was well under the median market forecast 4.5% sales increase. On the month, June’s Retail Sales declined by -0.2% despite expectations of 0.2% growth. June’s retail Sales excluding Fuel also failed to meet with median market expectations.

Euro (EUR)
As traders await Eurozone Consumer Confidence, due for publication later on Thursday afternoon, the shared currency strengthened versus most of its major peers. The appreciation is the result of easing tensions in Greece after MPs voted to accept a second package of reform proposals. In order to unlock vital financial aid, Prime Minister Alexis Tsipras resorted to a deal he has little faith in. The deal was only accepted by Greek MPs thanks to opposition votes, and most accepted the terms with a feeling of having little choice in the matter. Alexis Tsipras will need to work hard to win over his own political party who have openly criticised the PM for accepting a deal which is in complete contrast to his electoral mandate. The potential for a snap election has been quashed by opposition MPs, however, who are asking for the Prime Minister’s focus to be firmly set on bailout negotiations.

US Dollar (USD)
Given that geopolitical upheaval in Greece is looking to calm significantly now the Hellenic nation has accepted creditor demands in exchange for financial aid, demand for safe-haven assets has cooled. The US Dollar edged lower versus its major rivals in response to renewed risk-appetite. The US asset is likely to see heightened volatility in the early stages of the North American session, however, with several influential domestic data publications due for release. Of particular importance will be labour market data results as the Federal Open Market Committee (FOMC) highlighted labour market improvement as one of the main drivers of policy outlook.

As of Thursday, 23rd July 2015, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.4126, GBP USD exchange rate was 1.5516,
Dominic Lee About Author: (372 Posts)With over ten years experience as an economist – including four years spent as a chief economist with a major currency broker – Dominic has acquired a wealth of knowledge which he uses to forecast market movements. Dominic now works as an independent business advisor and writes for several financial publications.

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