Currency news - Sales data undermines Sterling

Sales data undermines Sterling - 18-01-08

Sterling remained more resilient on Thursday, pushing to highs near 1.98 against the dollar and 0.7420 against the Euro. There was a partial correction in US trading, but it still secured net gains on a wider correction from recent heavy losses. The UK currency struggled to hold above 1.97 against the dollar on Friday and then fell sharply after the UK data.

The UK retail sales data was weaker than expected with a 0.4% decline for December while there was also a decline in prices over the year which will maintain fears over a sharp slowdown in consumer spending.

There were mixed comments from Bank of Deputy Governor Gieve on Thursday. While he expressed considerable unease over the growth outlook on credit fears, Gieve also warned that there would be significant upward pressure on inflation over the next few months. There will still be strong confidence that interest rates will be cut in February, but with some increased doubts whether the bank will be able to cut aggressively over the next few months because of the inflation concerns.

Tim Clayton
Investica Ltd
E-mail: tim.clayton@investica.co.uk
+44 (0) 1452 781001

Full list of daily currency analysis

This analysis report is intended for distribution to ACM Advanced Currency Markets SA private, corporate customers and members. Information contained in this report is based on data obtained from sources considered to be reliable, however, no guarantees be made by ACM Advanced Currency Markets SA as to the accuracy, timeliness and completeness of the data. The opinions and forecasts contained herein are subject to change without notice and ACM Advanced Currency Markets SA accepts no liability for any losses, damages and/or expenses incurred arising from or in any way connected with the utilisation of all or part of this report. This report is meant for information purposes and is not intended to be and should not be construed as an offer or solicitation to buy, sell foreign exchange or indeed any other financial instruments. This report, or any part of it may not be reproduced or distributed without the prior consent of ACM Advanced Currency Markets SA.