Pound moves higher on retail sales release

Daily Currency Update

Sterling was on a charge during Thursdays trade, fuelled by lack of Brexit developments and better than expected economic data. Following Wednesdays better than expected CPI, retail sales yesterday didn’t disappoint. Sales expanded 0.2% from a month earlier in July and 3.3% over the last twelve months. Sales excluding Autos and Fuel also came in above estimates, expanding 0.2% inter-month and 2.9% on a yearly basis.
On the Brexit front, nothing new other than speculations of potential snap elections if PM B.Johnson does not pass a potential no-confidence vote. This motion is likely to be sponsored by Labour leader J.Corbyn along with further plans of delaying Brexit, calling for general elections and favouring another referendum. Of course, markets have already tilted Corbyn’s plan as nonsensical.
The outlook on the British Pound looks increasingly fragile in tandem with rising odds for a Brexit ‘no deal’ on October 31. In the meantime, the Irish backstop remains the exclusive obstacle for the resumption of talks between London and Brussels, although the subject appears relegated in light of preparations for the ‘hard-divorce’ case.
GBP/EUR has charged back above 1.09 this morning and a level last seen on the 5th August. Cable followed suit and broke back in to 1.21 territory, after this initially fell during Thursdays trade.