The pound extended slide against its major counterparts on Thursday’s European deals, following data showing an unexpected decline in nation’s retail sales in March, due to a fall in non-food store sales.
Data from the Office for National Statistics showed that retail sales including auto fuel dropped 0.5 percent on a monthly basis in March, reversing a 0.6 percent rise in February. This was the first fall in six months. Economists had forecast a 0.4 percent rise for March.
Excluding auto fuel, sales advanced 0.2 percent from prior month, slower than February’s 0.6 percent increase and the expected growth of 0.5 percent.
On a yearly basis, retail sales including auto fuel expanded 4.2 percent after rising 5.4 percent in February. Sales were expected to grow again 5.4 percent.
Separate data showed that public sector net borrowing excluding interventions decreased by GBP 0.4 billion from last year to GBP 7.4 billion in March. The expected level was GBP 7 billion.
European stocks are trading in a negative territory, after a private survey of Eurozone manufacturing and service sector activity came in weaker than forecast in April.
The pound advanced sharply yesterday, after the Bank of England’s minutes of April meeting showed that U.K. inflation might pick up at a faster pace by the end of year. This spurred speculation that the bank’s next move will be a rate hike, as hinted by BoE governor Mark Carney. Yesterday, the pound rose by 0.72 percent against the greenback, 0.92 percent against the yen, 0.82 percent against the euro and 2.48 percent against the franc.
The pound was lower against the franc, yen and the greenback in the Asian session.
In European trading, the pound edged down to 0.7162 against the euro, reversing from an early more than a 5-week high of 0.7116 hit at 3:00 am ET. The pound may possibly find support around the 0.73 zone.
The pound reversed from an early high of 1.5039 versus the greenback and more than a 5-week high of 180.44 versus the yen, edging down to 1.4959 and 179.30, respectively. At Wednesday’s close, the pound was valued at 1.5033 against the greenback and 180.26 versus the yen. On the downside, the pound is likely to find support around 1.48 against the greenback and 178.4 against the yen.
The pound, which advanced to 1.4605 against the franc in early deals, dropped to 1.4467 after the data. Next key support for the pound may be located around the 1.425 level.
Looking ahead, U.S. weekly jobless claims for the week ended April 18, Markit’s manufacturing PMI for April and new home sales data for March are set to be published in the New York session.
The material has been provided by InstaForex Company – www.instaforex.com