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Unexpected Decline In U.K. Retail Sales Drags Down Pound


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The pound weakened against its major counterparts in the European session on Friday, after a data showed that the nation’s retail sales fell unexpectedly in February.

Data from the Office for National Statistics showed that the retail sales volume dropped 0.3 percent month-on-month, in contrast to the 1.9 percent increase in January. Sales were forecast to climb 0.6 percent.

Excluding auto fuel, retail sales volume decreased 0.7 percent, reversing the 1.7 percent increase a month ago. Economists had forecast a 0.5 percent increase.

On a yearly basis, retail sales grew 7.0 percent but slower than the revised 9.4 percent increase logged in January and the expected 7.8 percent rise.

Similarly, annual growth in retail sales, excluding auto fuel, slowed to 4.6 percent from 7.5 percent in January. Sales were forecast to climb 5.6 percent.

The pound fell to 160.04 against the yen and 1.3171 against the greenback, off its early near a 6-year high of 161.49 and a 2-day high of 1.3225, respectively. The pound is likely to challenge support around 157.00 against the yen and 1.29 against the greenback.

The pound slipped to a 10-day low of 1.2209 against the franc and a 3-day low of 0.8364 against the euro, following its prior highs of 0.8332 and 1.2268 respectively. The pound is seen finding support around 1.19 against the franc and 0.86 against the euro.

Looking ahead, University of Michigan’s final consumer sentiment index for March, U.S. pending home sales and Canada manufacturing sales for February will be released in the New York session.

*Italy Mar Consumer Confidence 100.8 Vs. 112.4 In Feb, Consensus 108.3

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