After a lively week for sterling versus both the euro and US dollar, the pound ends the week roughly 1% down on both compared to Monday morning.
However, that was after strengthening in the early part of the week, making the losses in the latter part of the week seem more pronounced.
The latest prompt for sterling weakness has been retail sales bouncing back. This morning’s data shows 0.5% more sales than December, much against market expectations.
However, sterling has also been shaded by new expectations from the US that the Fed’s next interest rate rise could be 50 basis points rather than 25, as underlying inflation continues.
There has been plenty of economic data released over the course of this week for investors to digest, most of it positive for the UK economy. That includes inflation down, recession possibly avoided, earnings rising, unemployment claims falling, and now shoppers still shopping.
The picture of London’s stock markets looked more optimistic too. Equities in London gained for a fourth consecutive session yesterday, with the benchmark FTSE 100 climbing to a fresh record closing high above the 8,000 mark. Its advances were largely driven by gains in the technology, energy, and materials sectors.
In business news, Britain’s biggest energy supplier and owner of British Gas, Centrica revealed it made record profits of more than £3.3bn last year.
On the data front, it is a quiet day today and for the majority of next week for the UK.
Initial jobless claims and PPI in the US gave us an insight into the country’s economy yesterday. The number of people filing for unemployment fell slightly (to 194,000) while producer prices for final demand shocked markets after increasing 0.7% month-over-month in January. This marked the biggest increase in seven months.
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