Retail Sales Disappoint, Traders Await EC Brexit Review

The pound fluctuated as wage growth picked up more than expected but real wages fell because of higher inflation. Sterling-euro ended the day below 1.1200. Euro-dollar edged higher over the course of the day, breaking back above 1.1800, while sterling-dollarbriefly regained 1.3200 in overnight trading.

Previous Day's Market Highlights

The pound fluctuated as wage growth picked up more than expected but real wages fell because of higher inflation. Sterling-euro ended the day below 1.1200. Euro-dollar edged higher over the course of the day, breaking back above 1.1800, while sterling-dollarbriefly regained 1.3200 in overnight trading.
 
The Aussie gained on above-forecast employment data, which saw the Unemployment Rate fall to 5.5% in September. It later reversed some of those gains after data showed that economic growth in China slowed to 6.8% year on year in Q3, in line with expectations.
 
The kiwi dollar fell overnight after the Labour Party won enough support to form a government, hitting some of its lowest levels against the pound since late May.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP / EUR 1.1175 1.1433 1.1069 3.18%
GBP / USD 1.3209 1.3596 1.3027 4.19%
EUR / USD 1.1821 1.2005 1.1669 2.80%
GBP/AUD 1.6769 1.7201 1.6768 2.46%
GBP / NZD 1.8744 1.8773 1.8367 2.16%
GBP / CAD 1.6448 1.6798 1.6350 2.67%

Today's Market Highlights

Sterling may see additional pressure after Retail Sales slowed more than expected in September, declining 0.8% month on month, and with the European Council meeting for a two-day summit, starting this afternoon (from 13:00 BST). Lack of progress on Brexit negotiations continues to pose a significant risk to the pound’s strength, and sterling will remain vulnerable to any negative headlines.
 
In the afternoon, the dollar may weaken if the Philadelphia Fed Manufacturing Survey slows (13:30 BST), but the releases today are largely mid-level.

Today's Economic Calendar

Time Currency Release Consensus Previous
09:30 GBP Retail Sales MoM (Sep) -0.1% 1.0%
09:30 GBP Core Retail Sales MoM (Sep) 0.1% 1.0%
09:30 GBP Retail Sales YoY (Sep) 2.1% 2.4%
09:30 GBP Core Retail Sales YoY (Sep) 2.4% 2.8%
13:30 USD Initial Jobless Claims (13 Oct) 240K 243K
13:30 USD Philadelphia Fed Manufacturing Survey (Oct) 22.0 23.8
14:30 USD Fed's George Speaks