Sterling suffered on Thursday as adverse market conditions forced the currency lower. Euro and the US Dollar made considerable advances on the Pound as market sentiment declined due to “fears of a global growth slowdown owing to the spread of the Delta variant and expectations the Federal Reserve is preparing to withdraw stimulus”. As a result of this, Cable suffered its biggest daily fall since June yesterday and remains pressured going into today’s open.
Poor UK economic data released this morning has proved to be a further hindrance to the Pound. Overnight the Gfk Consumer Confidence report for August was forecasted at -7 but came in below that at -8 – showing that consumers are not as optimistic as expected about the economy’s performance in the next 12 months. Then this morning at 07:00 July’s Retail Sales widely missed expectations, coming in at 2.4%, 3.6% below expectations. While this figure is disappointing, many “experts pointed to the likely impact of rising COVID-19 cases prompting people to self-isolate”. The Office for National Statistics (ONS) said Retail Sales volumes in July were 2.5% down from the previous month taking them to the lowest level since shops reopened in April after the lockdown. This month’s reading is the biggest monthly decline in Retail Sales since January and, outside pandemic lockdowns, the largest since 2010.
Despite trading above 1.38 only recently, Cable fell into the 1.36 range on Thursday. GBPUSD started the session at 1.3711 and came under significant selling pressure as market sentiment declined. Cable went on to close at 1.3660.
GBPEUR also made a considerable loss yesterday. The pair started trading at 1.1747 and continued to decline on the day, finishing at 1.1693.
EURUSD in contrast was able to secure some subtle gains on Thursday. The pair opened at 1.1672 and closed at 1.1681.