GBP Bounces Higher After Strong ONS UK Sales Data
- Sterling rises to its best level of the day as UK Retail Sales beat expectations.
- Concerns for future spending cloud outlook.
The British Pound rose Thursday after the latest official retail sales data beat estimates on the upside. Data from the ONS show February sales increased by 3.7% year-on-year (expected 2.6%) and 1.4% compared with January 2017 (expected 0.4%) with monthly growth seen across all stores.
However, the three-month on three-month movement decreased by 1.4% for the second month in a row, the largest decrease since March 2010 and only the second fall since December 2013.
Commenting on today’s official retail figures, Kate Davies, ONS senior statistician wrote,
“February’s retail sales figures show fairly strong growth, though the underlying three-month picture shows falling sales as February's figures follow two consecutive months of decline in December and January. The monthly growth in February is seen across all store types. The underlying trend suggests that rising petrol prices in particular have had a negative effect on the overall quantity of goods bought over the last three months.”
GBPUSD jumped to a one-month high on the release as traders’ reassessed sterling’s outlook in light of the gloomy forecasts seen in the last few days on the back of falling real wages. The latest average wage data showed UK consumers earning less – wage growth fell to 2.2% from a previous month’s 2.6% - while consumer price inflation rose to 2.3% from 1.8%.
Chart: GBPUSD Five-Minute Timeframe (March 23, 2017)
--- Written by Nick Cawley, Analyst
To contact Nick, email him at Nicholas.firstname.lastname@example.org
Don't trade FX but want to learn more? Read the DailyFX Trading Guides
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.