Sterling gains slightly on Retail Sales, but not much.
Good morning. Sterling edged higher against the the dollar and the euro on Thursday on robust retail sales data, ending 4 straight days of decline. Gains were limited however due to a mixed outlook for the economy. Rates at 08:30am this morning are as follows:
- GBP/EUR 1.1747
- GBP/USD 1.5626
- GBP/AUD 1.5801
- GBP/NZD 2.1141
- GBP/CAD 1.5720
- GBP/CHF 1.5001
- GBP/ZAR 10.610
- GBP/HKD 12.150
- GBP/JPY 131.13
- GBP/HUF 320.01
- EUR/USD 133.01
Sterling gains on Retail Sales
UK retail sales rose 0.3% in November, broadly in line with expectations. But the previous month's sales were stronger than initially thought, with the Office for National Statistics (ONS) revising up October's figure from a rise of 0.5% to 0.7%.
The ONS said November's growth was driven by sales of toys, sporting goods, watches and jewellery. Retails sales are taking as an overall indicator of consumer confidence, and so the better than expected results helped push Sterling slightly higher against both the Euro and US Dollar.
EU agrees on permanent Eurozone rescue fund
EU leaders have agreed to set up a permanent mechanism to bail out any member state whose debt problems threaten the EU. The leaders agreed that in 2013 the permanent mechanism would succeed the eurozone's 750bn-euro bail-out fund, the European Financial Stability Facility (EFSF).
"We stand ready to do whatever is required to ensure the financial stability of the eurozone as a whole," Mr Van Rompuy said. The agreement says "member states whose currency is the euro may establish a stability mechanism, to be activated if indispensable to safeguard the stability of the euro as a whole".
The summit comes amid continuing concern about stability in the eurozone, as national debts and deficits have soared above the EU's targets. Portugal and Spain have been under financial market scrutiny since the Irish Republic was forced to be bailed out.
The news seems to have calmed the markets and given the Euro some strength. It's the weakness in the Eurozone of late that pushed GBP/EUR rates near to €1.20, so the better climate in the Eurozone could cause rates to fall.
Nothing of note for the UK today. From Europe we see German Business climate and business assessment measures. Also from the EU we have Trade Balance figures. This is a balance between exports and imports and usually generates some volatility for GBP/EUR rates.
Have a great weekend.
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