- Sterling slips in spite of upbeat Retail Sales figures
- Euro strengthens in spite of dovish European Central Bank (ECB)
By David Johnson
In spite of improved Retail Sales in the UK, the Pound slipped yesterday. Warmer weather did bring out the shoppers in June, but that wasn’t enough to deflect traders from their concerns over the Brexit negotiations. The Pound fell to its lowest level against the Euro in eight months and dipped below USD 1.30. Were the USD not so weak elsewhere, it is likely that the Pound would have fallen further on this exchange rate as well. The forecasts for this morning’s UK government borrowing figures are quite strong, so perhaps the Pound will find its feet and stop slumping.
The Euro was stronger across the board after the ECB’s press conference following their decision to leave everything on hold. ECB President, Mario Draghi, talked about discussing bond purchases in the board meeting in September. His tone was quite negative, but the markets seem to have ignored that and are pricing in tighter monetary policy later in the year. They are a contrarian bunch, these forex traders.
There is a distinct lack of data today, but we will get Canadian Inflation and Retail Sales data later on. Analysts are predicting a slowdown on both fronts, so there is plenty of scope for a weaker Canadian Dollar later in the day; especially as the US Dollar is weaker. The US is Canada’s chief export market, so it is not uncommon for the CAD to track the USD to some degree.
And that is about all we have to talk about today. Next week brings the first estimates of economic growth for the second quarter of the year for the UK and US, as well as plenty of central bank activity, so it should be a busy one.
In the meantime, have a great weekend.
In the store
A man approached a very attractive young woman in a large department store and said, "I've lost my wife here in the store. Would you talk to me for a minute please?" "Why do you want to talk to me?" she asked, puzzled. "Because every time I talk to a beautiful woman, my wife appears within 30 seconds."
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