Investing.com – sterling fell on Tuesday morning, due to increasing signs of economic contraction and fears that the situation does not become worse in the short term due to the drama’s persistent Brexit.
During the night, the British Retail Consortium said that retail sales at comparable stores decreased by 1.6% compared to June of the previous year. He added that the average sales during the last 12 months had fallen by 0.1% – the worst performance since 2012.
The consumption expenditure of the United Kingdom have been “much more moderate” in the second quarter, even after taking into account the distortion of the football world Cup last year, said the chief economist of the club EY ITEM, Howard Archer, via Twitter. He added that the figures “fuel for our belief (that) the GDP is likely to have contracted 0.2% quarter-over-quarter”.
The figures are the result of a series of reports from purchasing managers ‘ indexes exceptionally low last week, reflecting both a general decrease in investments due to the uncertainties related to the Brexit and the restoration of the constitution of emergency stocks after the postponement of the deadline of Brexit on 29 march, and the car plants have extended their period of annual maintenance to avoid overproduction in what was to be immediately after the Brexit.
Has 09h55, the book was 1,2485$, or a fraction more than the lowest two-year low it had reached the end of 2018. The pound was also down 0.3% against the euro to 1,1135€.
The elections endless the next leader of the Conservative party (who will automatically become Prime minister) also weigh heavily on the pound sterling, the two candidates expressing their willingness to leave the EU without any transitional arrangement in October in order to gain a party more dedicated to the Brexit as the country overall. A final televised debate between the two candidates, Boris Johnson and Jeremy Hunt must take place this evening.
Powell must also decide the preliminary remarks at an event organized by the Fed on the stress tests of the banks at 14.45, which may give indications on its opinion on the implications of the employment report last week for the future path of interest rates.
Futures contracts on the dollar index, which tracks the greenback against a basket of currencies of developed markets, have reached their highest level in nearly three weeks, thanks in large part to the weakness of the pound sterling. At 9: 55, they were 97,082, up 0.1% compared to Monday night.
Against other currencies, the dollar continued to climb slowly in the wake of the employment report, although traders were reluctant to make new bets before the testimony of the president of the federal Reserve’s Jerome Powell, Wednesday, and Thursday.