Sterling rebounds on strong retail sales, PMI awaited



© Reuters. FILE PHOTO: Wads of British Pound Sterling banknotes are stacked in piles at the Money Service Austria company’s headquarters in Vienna

By Ritvik Carvalho

LONDON (Reuters) – Sterling rebounded on Friday from a sharp fall on Thursday after strong retail sales data which showed Britain’s economy might already be recovering from its worst annual contraction in 300 years.

The pound fell erased its weekly gains against the dollar on Thursday, but was back in the black on Thursday, trading 0.3% higher on the day at $1.3879 by 0821 GMT.

British retail sales rocketed last month as consumers prepared for a partial lifting of coronavirus lockdown restrictions, according to official data which also showed record peacetime government borrowing.

Sales volumes leapt by 5.4% in March from February, the Office for National Statistics said, with clothing stores benefiting especially. Economists polled by Reuters had expected a month-on-month increase of 1.5%.

“Much better than expected March UK retail sales have just been released and position the UK and GBP well for a strong second quarter,” said strategists at ING in a research note.

British consumer sentiment rose to its highest since the start of the COVID pandemic this month as the economy reopened partially, a closely watched survey showed on Friday, but the increase was smaller than economists had expected.

The GfK Consumer Confidence Index increased to -15 in April from -16 in March, its highest since a survey conducted in early March last year, before the country went into lockdown.

“We think this data represents further evidence of a return to normality as UK lockdown restrictions are eased, a process that we expect to have accelerated in April, as non-essential retail outlets were allowed to open (though we note that today’s GfK consumer confidence data implied a smaller than expected gain in sentiment to -15 in April from -16 in March),” said Paul Jackson, Global Head of Asset Allocation Research at Invesco, commenting on the retail sales figure.

READ  Ghosn met Lebanese president after fleeing Japan - sources

Flash readings of purchasing managers indexes for Britain due at 0830 GMT will provide a further read on how British industry is faring as the economy reopens.

British manufacturers’ hopes for an economic rebound rose to their strongest in 48 years this month as the country began to recover from the slump caused by the COVID-19 pandemic, the Confederation of British Industry said on Thursday.

Against the euro, sterling was 0.1% higher at 86.77 pence. Sterling fell to its lowest in almost a week against single currency on Thursday.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here