British Pound Jumps on Improved June Retail Sales Figures
THE TAKEAWAY: GBP Retail Sales (JUN) > +0.2% as expected, from +2.1% (m/m), +2.1% versus +1.6% expected, from +2.3% (revised higher from +2.1%) (y/y) > GBP Retail Sales ex Auto Fuel (JUN) > +0.2% versus +0.3% expected, from +2.1% (m//m), +2.2% versus +1.7% expected, from +2.1% (revised higher from +1.9%) (y/y) > GBPUSD BULLISH
The British Pound is rallying this morning on the back of an overall stronger than expected June Retail Sales report for the United Kingdom. Although only ranked as a “medium” importance event on the DailyFX Economic Calendar, the UK Retail Sales report is equivalent to the US Advance Retail Sales report; both are proxies for consumption trends in economies whose headline GDP is comprised of 62% and 72% consumption, respectively.
Overall, the tone of the report was improved, with both the headline and core yearly figures beating estimates. In terms of comparison, the headline Retail Sales figure held up quite well once stripped to the core (ex Auto Fuel), actually improving by +0.1% over the core. Certainly these figures can justify the recent uptick in UK inflation figures.
GBPUSD 1-minute Chart: July 18, 2013
Charts Created using Marketscope – prepared by Christopher Vecchio
Following the release, the British Pound initially skipped lower against the US Dollar, from $1.5159 to 1.5157 before surging to as high as 1.5207. At the time of writing, the GBPUSD had settled at 1.5193. This is the second time in two days that the British Pound has seen a morning surge on the back of positive economic signals.
--- Written by Christopher Vecchio, Currency Analyst
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