Strong UK retail sales help to push the Pound higher but the real test for the Pound now awaits on 8th June. The following table provides GBP/EUR, GBP/USD and GBP/AUD exchange rate movements for the duration of yesterday’s trading session.

Currency Pair% ChangeDifference on £200,000
GBP/EUR1%€2360
GBP/USD0.85%$2240
GBP/CAD1.05%$3860

Sterling flies on strong Retail Sales

Pound sterling notesThe Pound has received a major boost after UK retail sales data impressed the markets yesterday. Retail sales increased to 2.3% in April, considerably more than the expected 1% and which resulted in immediate and substantial gains for the Pound across all of the major currencies. The issue for Britain at the moment is that the economic recovery has largely been led by consumer spending. After this week’s very high inflation numbers and notable weak wage growth the feeling is that people are going to start feeling the pinch in their pockets. The strong numbers yesterday suggest otherwise, for the time being anyway.

Retail sales generally result in a short term market movement rather than a sustained one so those clients looking to buy Euros or dollars may be wise to move sooner. This is especially true considering good weather in April has been offered as the main reason for the improvement.

Brexit & UK Election

With the Brexit negotiations on ice until after the general election the main focus for the UK and the Pound now is what happens 8th June 2017. A strong conservative majority which is expected would likely see a rally for the Pound as it should bring political stability for the next five years. However those clients that may be hoping for a major rally beyond this after the general election are likely to be disappointed. Although a stable government would be seen as positive, the uncertainty surrounding Brexit will inevitably continue.

You may wish to read this morning’s Euro section to see how the German election is likely to impact Brexit.

Those clients with a pending requirement would be wise to get in touch before the election and take the risk out of the volatile currency markets as the Pound has notably fallen in the run up to the last two general elections. Speak with a member of our team today on 01494 725353 or email me here to discuss further.