ForexLive European FX news wrap: Sterling falls on UK retail sales disappointment

Author: Justin Low | Category: News

Forex news from the European morning session - 17 January 2020

UK retail sales has not posted a positive monthly reading since July 2019

Headlines:

Markets:

  • JPY leads, GBP lags on the day
  • European equities higher; E-minis up 0.25%
  • US 10-year yields up 0.9 bps to 1.816%
  • Gold up 0.3% to $1,557.18
  • WTI up 0.4% to $58.74
  • Bitcoin up 1.6% to $8,819

UK retail sales
The pound was the main mover on the session as the BOE rate cut fever continues to build amid a slump in UK December retail sales activity - despite Black Friday sales.

The monthly drop continued a streak of zero growth in UK retail sales over the last five months and that represents the worst run since ONS records began in 1996.

Cable initially rose to a high of 1.3118 in the run up to the data but was met with a harsh reality check as price tumbled to 1.3050 in the aftermath before chasing a low of 1.3027.

This came as BOE rate cut odds for January rose to ~73% from ~60% prior to the data.

Meanwhile, the dollar is keeping a little more firm as the euro also eased a little from 1.1130 to 1.1110. Large expiries mired between 1.1100 to 1.1150 is likely to keep price action limited before they roll off later in North American trading.

USD/JPY is little changed around 110.15-25 as stocks kept more steady in general while European equities are running higher, trying to chase overnight gains in Wall St.

The rest of the major currencies bloc isn't doing much as traders continue to search for a key theme to latch on to after the US-China trade deal signing this week.

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