A bitter disappointment for the pound: UK retail sales fall 0.5% instead of rising 0.4%. The revision is also negative with 0.6% instead of 0.7% originally reported. Year over year, we have a rise of only 4.2% against 5.4%. Core sales rose only 0.2% instead of +0.4% with y/y up 5% below 5.4% expected.
GBP/USD is extending its falls below 1.50 and reaches 1.4965.
UK retail sales were expected to rise by 0.4% in March after a strong rise of 0.7% in February. Data points are becoming more sensitive as the elections get close.
GBP/USD was sliding below 1.50 towards the publication due to a stronger USD.
Here is the preview: trading the retail sales with GBPUSD. This monthly health check of the British consumer always moves markets.
At the same time, the Public Sector Net Borrowing figure was released. It was expected to show a rise to 6.6 billion from 6.2 billion beforehand. This has a more significant political impact, but markets-wise, retail sales carry more weight. The actual number is 6.7 billion.
Sterling had a sterling performance in recent days, mostly boosted by the relatively upbeat MPC meeting minutes.
More: GBP: Trading UK Elections – ING
