Forex - Pound strengthens after robust UK retail sales data UPDATE |
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Thu, 22 Mar 2007 11:16
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(Updates with analyst comments)LONDON (AFX) - The pound rose against other major currencies after stronger-than-expected UK retail sales data for February.Retail sales were shown to have risen 1.4 pct from January to February, well above the 0.8 pct gain expected by analysts. On a year-on-year basis, retail sales grew by 4.9 pct, above forecasts for a more modest 4.0 pct rate.Furthermore, January's large 1.8 pct monthly drop registered a month ago was revised to only a 1.5 pct drop.The data shows 'that the consumer is still spending,' said Howard Archer at Global Insight.He noted that sales volumes rose significantly and that the data makes up for January's sharp drop. However, higher interest rates will 'add to the significant headwinds that many consumers face', so that disposable income growth will remain muted.This suggests that while the Bank of England is likely to raise rates by a quarter point to 5.50 pct, any more than that is unlikely, Archer said.The pound jumped to 1.9718 usd just after the data from 1.9675 previously and then eased back to around 1.9700. It also gained ground on the euro, which weakened to 0.6775 stg from 0.6792 stg.carlo.piovano@thomson.comcp/lamCOPYRIGHTCopyright AFX News Limited 2007. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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Forex - Pound well-bid but vulnerable to disappointment in retail sales data 