Trading news

Sterling sinks to two-week low as dollar surges

Sterling fell to its lowest in two weeks against the dollar on Tuesday as the greenback surged against the euro and a raft of other major currencies following its fourth consecutive weekly fall.

Another batch of downbeat data - this time from the BRC measure of retail sales and the first fall in UK house prices since the vote to leave the European Union last June - also added to a broadly weaker tone to the pound.

Sterling has fallen more than 3 cents since hitting a 7-week high against the dollar last week, knocked back by a handful of sentiment surveys and a more cautious than expected message from the Bank of England on inflation and the path of interest rates.

"The general tone of some of the key consumption data coming out of the UK has been less than stellar," said Stephen Gallo, European head of FX strategy with Bank of Montreal. "But the dollar sell-off broke abruptly today and sterling has suffered from that. To me this looks like a move to sell Europe as much as a move to sell sterling in particular."

In early deals in London, the pound fell by as much as 0.9 percent to $1.2347 before recovering to $1.2372. It was steady against a broadly weaker euro at 86.19 pence. Data from mortgage lender Halifax Bank of Scotland showed British house prices fell 0.9 percent in January alone after a 1.6 percent surge in December, compared to expectations prices would hold flat on the month.

The British Retail Consortium numbers showed consumers also reined in their spending last month in comparison to a year earlier, adding to signs that they are turning more cautious as last year's Brexit vote pushes up inflation.

On a like-for-like basis - which excludes new store openings - sales fell by 0.6 percent compared with January last year, the first time like-for-like sales have fallen since August last year.

AG Markets Review

Tuesday, 07 Feb, 2017 / 4:42

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Source : https://www.ag-markets.com/news/

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