Sterling has mixed week, plus retail figures contract

Published: 23 March, 2012

Sterling had a mixed week and the slump in retail sales figures released yesterday did little to help the negativity in the UK.

Currency rates - March 23

EURO/GBP 1.1985

US$/GBP 1.5870

CHF/GBP 1.4447

CAN$/GBP 1.5861

AUS$/GBP 1.5244

ZAR/GBP 12.198

JPY/GBP 131.39

HKD/GBP 12.3180

NZD/GBP 1.9526

SEK/GBP 10.711

AED/GBP 5.8321

US$/EURO 1.3235

INR/GBP 81.08

Data showed a retail contraction of -0.8% as opposed to the -0.5% expected. Sterling's week saw ups and downs against the euro and dollar, however it did strengthen against the commodity backed currencies. The Bank of England's minutes revealed that two of its members voted for £25 billion more to be pumped in to the economy which led some economists to predict that further stimulus could be on the way. Data released also showed public borrowing rose by much more than expected last month. The annual budget included several new policies on tax and included several unpopular proposals; however, the it did little to effect sterling's strength as the announcements were largely expected.

There was very little data released from the Eurozone this week; but, a raft of poor Purchasing Managers' Index (PMI) data out yesterday with both the manufacturing and services sectors contracting across Europe did little to reassure the market.

A mixed week for the US dollar as risk aversion was the main driver in the market on the back of poor news from China. Data released yesterday revealed that the number of people filing for unemployment insurance fell to the lowest level in four years, reaffirming the feeling that the labour market is leading the US economic recovery. Mixed housing data revealed the number of existing home sales fell short of the markets expectation; but, the number of new residential permits rose more than anticipated. More housing data is released today which will provide data on the number of new home sold; any variation from the expected value could cause volatility so call in now for the latest update and a live quote.

Elsewhere, risk aversion drove the market as poor data released from China sparked fears that the world's second largest economy could be slowing down faster than economists had predicted. This negativity was amplified yesterday as worse than expected PMI data was also revealed. The main release today is the Consumer Price Index (CPI) figures from Canada which is expected to show a slight increase. Call in now for the latest news and a live update.

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