The volume of retail sales in Britain rose by 0.2%. While this is a modest gain, the release exceeded the low expectations of a fall of 0.5%. GBP/USD breaks above another resistance line.
Consumer confidence fell in Britain in recent months, also due to higher taxes. VAT rose and became heavier burden on consumers, discouraging shopping. Indeed, the previous month saw a drop of 0.9% (revised lower from 0.8%) and this created expectations for another drop of 0.5% this time. So, the rise of 0.2% is quite a big surprise.
GBP/USD enjoyed the greenback’s weakness during the Asian session and managed to break above 1.64. It then continued higher and also broke above 1.6450. Towards the release, it got stuck under 1.6515. This was broken now, with GBP/USD trading at 1.6537.
Significant resistance appears only at 1.67, which was a s stronghold in 2009. 1.6450 now turns into support. For more lines and technical analysis, see the GBP/USD forecast.
Also the Public Sector Net Borrowing came out better than expected – a net lending figure of 16.4 billion pounds was lower than 18.8 billion that was expected. Perhaps the government, that vowed to cut the deficit would wish for a surplus (seen a few months ago). Last month’s deficit was revised to 7.9 billion, so the overall picture regarding debt is better than known before the release.
Yesterday was different for the pound – the MPC Meeting Minutes hinted that a rate hike wouldn’t come as soon as May, but rather pushed back to June or July. In addition no new members voted for a rate hike. This weakened the pound for some time, but the downfall of the greenback across the board eventually won.
Later today, US unemployment claims and the Philly Fed Manufacturing Index will set the tone for the end of the week, as tomorrow’s Easter holiday means very light trading.
