Sterling Rallies as UK Retail Sales Rise More Than Expected
THE TAKEAWAY: UK retail sales climb 0.6% in September -> Rise in sales follow 2 months of decline -> Sterling rallies
UK retail sales increased for the first time in three months, sending the British Pound to a new session high. Retail sales (excluding auto fuel) were up 0.6% in September, beating expectations for a 0.3% increase and following August’s revised 0.2% drop in sales. Retail sales were also up 2.9% from September 2011, according to the UK Office for National Statistics.
The average weekly spending in September was 6.6 billion Pounds, and clothing sales surged 2.1% in September. The prices of goods rose 1.3% in September, as upward pressure came from the prices of textiles, clothing and footwear.
The UK GDP dropped for the third straight quarter in Q2, and Pound investors are looking for signs of a recovery from the technical recession. Therefore, increasing retail sales could be seen as an improvement to the UK economy and therefore Pound positive.
That’s why the British Pound climbed to 1.6150 against the US Dollar and set a new session high. Resistance could be provided near 1.6154, by a month long downward trend line.
GBPUSD 15-minute: October 18, 2012
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