FX Headlines: GBP/USD Morning Rally Continues as Retail Sales Beat
- Return to growth after summer lull reinvigorates hopes for further UK expansion.
- Follows largest drop in Jobless Claims in 16 years in September.
- British Pound rallies across the board as a result.
The UK economy, after having its best quarter in 16 years in the 3Q’13, is building on yesterday’s data that showed the largest drop in Jobless Claims in 16 years this morning after another improved data report. Consumption in the UK increased by more than expected in September with Retail Sales topping both the prior and forecasted figures.
In context of the aforementioned trends, it’s clear that an improving labor market is helping revive other sectors of the economy.
As a result, the British Pound is building on already impressive morning, especially against the US Dollar – one aided by a US downgrade (from Chinese agency Dagong) and another one rumored to be on its way (from one of the big three: Fitch Ratings, Moody’s Investors Service, or Standard & Poor’s).
There are few other influences on the European currencies today, as this rounded out all of the important UK economic data on the day; and the DailyFX Economic Calendar is void of “medium” or “high” ranked data for both the Euro-Zone and Switzerland.
Here’s the data lifting the world’s oldest currency:
- Retail Sales (SEP): +0.6% versus +0.4% expected, from -0.8% (m/m).
- Retail Sales (SEP): +2.2% versus +2.1% expected unch (y/y).
GBPUSD 1-minute Chart: October 17, 2013
Charts Created using Marketscope – prepared by Christopher Vecchio
Following the data, the GBPUSD rallied from $1.6068 to as high as 1.6089, but soon retraced back down as low as 1.6062. At the time this report was written, the pair ultimately had rebounded back to session highs at 1.6092, and was trading just over two-pips short of the high at the time this report was written. The data today will help the GBPUSD maintain its upward trajectory, as noted in the second intraday SSI update yesterday.
--- Written by Christopher Vecchio, Currency Analyst
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