Thursday saw a swing in rates for the pound/dollar cross
following better than expected retail sales data. Early trading saw cable climb
by nearly half a point following the positive UK data but the cross could not
sustain the move a gradually fell away, tracking a fall in the euro against the
greenback.
Data released by the Office of National Statistics (ONS)
showed that UK
retail figures had increased by 0.6% for September compared with a 0.1%
contraction in August. The rise was put down to demand for school and winter
clothing and helped sales recover following poor figures in August due to the
Olympics. The positive news saw the GBP/USD cross rise from $1.6117 to $1.6168,
edging back to the high of $1.6180 we saw on Wednesday following the better
than expected UK
employment figures.
This positive news for the UK will lead to further speculation
regarding the Bank of England QE programme. Many experts had predicted the BoE
will add to the £375 billion they have already pumped into the UK
economy, but if GDP figures show the economy has grown in the third quarter we
may see them hold of for the time being. If the BoE were to opt for further
stimulus we could see sterling come under pressure and rates could fall against
a number of different currencies.
Trying to predict the currency markets is almost impossible
to predict, with so much volatility in the markets getting the timing right on
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