Filed Under:
Forex pairs in this Article » EUR/USD, GBP/USD (London) - Sterling tumbled on a surprise fall in UK retail sales volumes, down 0.9 percent in August. It was a significant shortfall from consensus expectations of a 0.4 percent increase.

The Office for National Statistics reported that the main source of downward pressure came from the food sector (-2.7 percent), where feedback suggested that sales were back to a more normal level for this time of year. This followed a strong performance in the previous month (2.7 percent) when sales were boosted from the hot weather.

GBP/USD fell sharply to a low of USD1.6064, from 1.6146. The fall comes off eight-month Cable highs on consistently improving UK macro conditions and upbeat minutes from the September Bank of England Monetary Policy Committee meeting.

The MPC voted unanimously to keep interest rates at 0.5 percent and to leave the stock of assets bought under its quantitative easing programme unchanged at GBP375bn.

UK 10-year gilts shed 15 points to 2.86 percent on yesterday’s announcement that the Federal Reserve would be maintaining its monthly asset purchase programme unchanged.

5-Year gilts currently stand at 1.63 percent, down 17 points.
comments powered by Disqus