The pound was slightly stronger yesterday against most major currencies, but was flat against the US dollar. Looking at data, while Halifax house price growth matched expectations, BRC retail sales were very weak. Falling retail sales suggest headwinds for economic growth in the future, considering that consumer spending makes up a significant portion of the British economy. While the pound was supported by positive Brexit comments from Theresa May earlier in the week, this is no longer the case today.
GBP/USD is currently just above 1.3140. EUR/GBP is slightly stronger and the pair is currently trading above 0.8820. The pound is currently down against both the Australian dollar and the Canadian dollar. GBP/AUD is above 1.7150, while GBP/CAD is just below 1.6780.
Looking at the economic calendar for the pound this week, it includes retail sales, GDP estimates and industrial production figures. On Tuesday, BRC retail sales were weak (-1% vs. 1.9% prior) while Halifax House prices met expectations (4.5% vs. 4.5% expected). On Thursday, we’ll see RICS Housing Price Balance survey data as well as NIESR GDP growth estimates for October. Finally, on Friday we’ll see industrial production, manufacturing production and trade balances. Last week, the Bank of England hiked rates while dampening expectations of more rate cuts in the future.