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UK retail sales disappoint with -0.9% – GBP/USD falls

The Brexit effect might already be felt: retail sales dropped 0.9% in June, worse than expected. Year over year, a rise of only 4.3% was recorded. Core sales also fell 0.9% and rose 3.9% y/y. All figures fell short. Publis Sector Net Borrowing came out at 7.3 billion, better than a bigger deficit of 9.3 billion expected.

GBP/USD remains pressured, but it seems markets were front-running the event. Update: after the initial hesitation, GBP/USD falls to 1.3170.

The UK was expected to report a drop of 0.6% in retail sales m/m in June, the month of the EU Referendum. This  comes after a rise of 0.9% in May. Year over year, a rise of 5% was predicted,  after 6% beforehand. Core retail sales carried expectations for a drop of 0.6% after +1% and 4.8% y/y after 5.7%.

GBP/USD continued advancing gradually,  fueled by a not-so-terrible BOE assessment of the economy post Brexit. Cable traded around 1.3250, continuing its recovery within wide ranges seen lately but slid in the last minutes.

More:  Sell GBP/USD – Morgan Stanley Trade Of The Week

Here is the chart:

GBPUSD July 21 2016 rising on less fear

For GBP/JPY, the move is even bigger, as it is  compounded with  helicopter denial from Kuroda. The yen is strengthening, pushing pound/yen ever lower.

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.