London RationalFX

RationalFX: GBP ends week on the back foot

RationalFX: Sterling ends the week on the back foot having reversed its recent gains. GBP/EUR fell 0.2% on the week. But GBP/USD has at least held somewhat steady.

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However, this morning data showed GBP retails sales Year on Year (YoY) and Month on Month (MoM) both beat expectations comfortably, coming in at 7.2% and 5.4% respectively. These readings were significantly higher than the consensus readings of 1.4% and 3.5%.

The Office for National Statistics (ONS) said March marked a return to sales levels higher than those  before the pandemic began. This is despite continued restrictions to non-essential retail. The data underpins the narrative that the UK economy is likely to rebound strongly in the second quarter of the year. This should lead to support for the pound.

UK PMI data for April for manufacturing and services sectors are released at 9:30 AM  today. Both are predicted to read at 59 but any reading higher could push sterling higher.

Finally, as of yesterday evening, 33.2M people in the UK had received their first dose, with 11.1M receiving their second.

Key announcements

09:30 AM – GBP- GBP Markit Manufacturing PMI (April)

08:30 AM – EUR – German Markit Manufacturing PMI (April)

08:30 AM – EUR- German Markit PMI Composite (April)

09:00 AM – EUR-  Markit PMI Composite (April)

14:30 PM – EUR- European Central Bank President Christine Lagarde Speech

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