The United Kingdom's (UK) retail sales data, a key indicator of consumer spending, fell by 0.4% month-over-month (MoM) in February, below the 0.8% forecast, following a 2% increase in January, which was revised upward from the initial 1.8%, as reported by the Office for National Statistics (ONS) on Friday.
When looked at over a year, consumer spending increased faster than expected, growing by 2.5% instead of the estimated 2.1%. However, this growth was slower compared to the previous month's revised figure of 4.8%, which was updated from 4.5%.
UK retail sales, excluding fuel, fell by 0.4% compared to the previous month, which was lower than the expected drop of 0.8%. This comes after a 2.2% increase in January, which was later adjusted upwards from the initial 2%. When looking at the yearly change, retail sales excluding fuel rose by 3.4%, which is less than the previously reported 5.9%, but higher than the earlier estimate of 5.5%.
Market reaction.
The immediate reaction of the Pound Sterling (GBP) following the data release has been negative. As of writing, GBP/USD trades almost unchanged around 1.3330.
UK Retail Sales Overview
The UK Office for National Statistics is set to release the monthly Retail Sales data later this Friday at 07:00 GMT. The report is likely to show that retail sales dropped by 0.8% in February, which is a big fall compared to the 1.8% increase seen in January.
On an annualized basis, Retail Sales are forecasted to have increased by 2.1% during the reported month, down from 4.5% in January. Meanwhile, core Retail Sales – excluding fuel – are expected to come in at -0.8% MoM.
How might UK retail sales impact the GBP/USD exchange rate?
Before the important consumer spending numbers came out, the GBP/USD currency pair started moving upwards and, for now, appears to have ended a three-day period of losses. This is happening as the US Dollar has slightly weakened. If the data turns out to be better than expected, it could support the Bank of England's firm stance on interest rates and give more strength to the British Pound.
On the other hand, a bad report might hurt the value of the British pound. Also, if people think the US Federal Reserve will raise interest rates, this could help the US dollar and limit how much the GBP/USD exchange rate goes up.
The immediate market reaction to a meaningful divergence from the anticipated Retail Sales figures is likely to remain limited, as the market focus remains concentrated on developments surrounding ongoing conflicts in the Middle East.
When looked at over a year, consumer spending increased faster than expected, growing by 2.5% instead of the estimated 2.1%. However, this growth was slower compared to the previous month's revised figure of 4.8%, which was updated from 4.5%.
UK retail sales, excluding fuel, fell by 0.4% compared to the previous month, which was lower than the expected drop of 0.8%. This comes after a 2.2% increase in January, which was later adjusted upwards from the initial 2%. When looking at the yearly change, retail sales excluding fuel rose by 3.4%, which is less than the previously reported 5.9%, but higher than the earlier estimate of 5.5%.
Market reaction.
The immediate reaction of the Pound Sterling (GBP) following the data release has been negative. As of writing, GBP/USD trades almost unchanged around 1.3330.
UK Retail Sales Overview
The UK Office for National Statistics is set to release the monthly Retail Sales data later this Friday at 07:00 GMT. The report is likely to show that retail sales dropped by 0.8% in February, which is a big fall compared to the 1.8% increase seen in January.
On an annualized basis, Retail Sales are forecasted to have increased by 2.1% during the reported month, down from 4.5% in January. Meanwhile, core Retail Sales – excluding fuel – are expected to come in at -0.8% MoM.
How might UK retail sales impact the GBP/USD exchange rate?
Before the important consumer spending numbers came out, the GBP/USD currency pair started moving upwards and, for now, appears to have ended a three-day period of losses. This is happening as the US Dollar has slightly weakened. If the data turns out to be better than expected, it could support the Bank of England's firm stance on interest rates and give more strength to the British Pound.
On the other hand, a bad report might hurt the value of the British pound. Also, if people think the US Federal Reserve will raise interest rates, this could help the US dollar and limit how much the GBP/USD exchange rate goes up.
The immediate market reaction to a meaningful divergence from the anticipated Retail Sales figures is likely to remain limited, as the market focus remains concentrated on developments surrounding ongoing conflicts in the Middle East.
