Positivity emerged from the UK yesterday by way of improved retail sales – a usually solid indicator of economic performance – with an increase by 0.2% this month as opposed to August’s 0.0% result. Food sales were seen to decline by 0.9%, however, which posed a slight drag on elation, but overall the mostly positive sentiment we’re seeing did little to boost Sterling’s worth, resulting in a drop by 0.2% against the euro and 0.1% drop against the dollar. There is not much on the UK’s calendar today so, for the most part, it’s a case of dealing with the fallout from the US’s monetary policy decision yesterday.
Good trade balance data out from Italy helped contribute to EUR strength, although the single currency gave up some gains as data from the US began to filter through. Finland, for what seems the first time, contributed to European uncertainty with protests on the streets against austerity measures. This is coupled with the lowest growth seen for a Eurozone country this year. In a similar manner to the pound, the euro was affected by the US interest rate decision in that it now has an impact on European exports.
The big event, of course, was the US’s decision to leave interest rates on hold. However, this was not a unanimous decision which shows that the tide is changing in favour of raising the rate as soon as possible. Fed Chairwoman, Janet Yellen, did point out that the US is performing well at present.
(Market News Provided by FXstreet)