Broad-based advance as UK retail sales deliver a positive surprise

Following on from the boost to GBP received at yesterday's MPC Minutes release we note sterling is mixed this morning - we have some retail sales numbers from the ONS at 9:30 which are predicted to confirm an improving UK economy.

Highlights:
@9:30: UK retail sales beat expectations underpinning sterling
@11:30: IMF warnings back views that Bank of England has space to be accomodative

17:10: Friday sees public sector borrowing data

All the main data events of the week are now behind us, Friday brings with it public sector borrowing numbers.

The Net Borrowing released by the National Statistics captures an amount of new debt held by the U.K.

Consensus estimates are for a figure of £9.450B to be announced, last month's number came in at £10.535B.

We don't see much opportunity for this data to shake sterling. (But we do find it damn alarming that we still can't earn what we spend, these numbers are eye watering!).

16:04: Deutsche Bank forecast GBP-EUR at 1.2 at end of 2014

Latest exchange rates from Deutsche Bank show gains for GBP versus the EUR but losses versus the US dollar in the long term . See where sterling is headed over the course of the next two years.  

13:44: Outlook for GBP versus the US dollar and the euro

Our latest insights into the outlook for sterling against the US dollar and against the euro.

13:00: Spot rates in early afternoon

The British pound has edged higher against most major currencies on Thursday morning thanks to the strong retail sales figures released at 9:30.

• GBP-USD is 0.06 up on a day-to-day basis at 1.5222.
• GBP-EUR is 0.2 higher at 1.1616.
• GBP-AUD is 0.8 pct higher at 1.6605.
• GBP-NZD is 0.33 pct higher at 1.9306.
• GBP-CAD is 0.15 pct higher at 1.5860.

Please note that these are spot market quotes - your bank will affix their own discretionary spread to the numbers. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering you more currency. Please learn more.

12:20: Where to for GBP versus NZD?

We take a look at the technical picture of GBP-NZD here. Short-term tipped to favour the kiwi it seems.

11:30: IMF warns of slow recovery, low inflation

The IMF has today said the UK recovery will be slow. A further worry for those hoping for a stronger sterling is the IMF's inflation forecast. The IMF say:

"Underlying inflation is, however, modest. Against the backdrop of a large output gap, inflation is expected to decline to the 2 pct target over the medium term."

Growth will be slow say the IMF:

"Economic activity is projected to recover going forward, but the pace of expansion is expected to be weak relative to the scale of under-utilised resources. As a result, the output gap is projected to remain sizeable for an extended period, portending the risk that continued cyclical weakness will lead to a permanent loss in the economy's productive capacity."

This helps explain why the Bank of England are being tipped to remain proactive - a negative for sterling.

10:56: Buy GBP-EUR on setbacks

 Piet Lammens at KBC Markets has today told clients that he is looking to sell the euro against the pound on any spikes in EUR-GBP:

 "Yesterday we advocated stop-loss protection on EUR/GBP longs as we assumed that the market was positioned sterling short/expected a soft tone from the minutes.

 "After yesterday’s rebound of sterling, the topside in EUR/GBP should be better protected. There might be quite some volatility ahead of us in the run-up to the August meeting. Even so, we change our short-term bias for EUR/GBP and look to sell EUR/GBP in to strength in case of return action toward the recent highs."

Is this a trading strategy worth following? When do you sell the spike in EUR-GBP? Identify, follow and copy the most successful traders on the world's largest social trading setup and substantially improve your odds at taking on the EUR-GBP rate.Learn more here.

9:45: The UK retail sales figures in massive beat

Year-on-year UK Retail Sales increased 2.2 pct in June, compared with the 2.1 pct rise in May and above forecasts of +1.7 pct.

On a monthly basis UK Retail Sales rose 0.2 pct in June, after growing 2.1 pct in May, as projected.

Annual Retail Sales excluding Fuel increased 2.1 pct, down from the 2.3 pct rise but above market consensus of 1.6 pct growth. Month-over-month Retail Sales excluding Fuel edged up 0.2%, following a 2.1 pct increase, as expected.

9:30: UK retail sales in line with expectations, GBP gets a boost

UK retail sales are in line with  expectations for June, ex auto fuel sales rose 0.2% on the month, the anual rate  fell to 2.1% - sterling actually recovering earlier losses versus the Euro and US dollar.

9:17: Sterling in fresh advances against Australian dollar - the reasons are grey

Why is the Australian dollar losing out to the pound again? The answers are said to be found in the grey world of commercial trades and exotic payouts… see what the latest flows analysis reveals on the AUD.

8:25: GBP tipped for boost on back of retail data

UniCredit Bank give their prediction on sterling ahead of this morning's retail data:

"Firmer UK retail sales this morning are likely to help cable further consolidate gains above 1.52, but we still remain skeptical about riding a more sustained rally above 1.53, given the overall market picture. EUR-GBP is expected to again steady mostly in the 0.86-0.8650 band."

8:18: Spot pound exchange rates

The British pound sterling (Currency:GBP) is decidedly mixed on Thursday morning:

The pound to euro exchange rate is 0.13 pct lower at 1.1576.
The pound to Australian dollar exchange rate is 0.6 pct up at 1.6569.
The pound versus US dollar is 0.33 pct lower at 1.5162.
The pound versus New Zealand dollar is 0.25 pct higher at 1.9288.
The pound to South African Rand exchange rate is flat at 14.9752.

Please note that these are spot market quotes - your bank will affix their own discretionary spread to the numbers. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering you more currency. Please learn more.

8:17: Today's main eco event - retail sales data

The key event comes at 9:30 in the form of Retail Sales (YoY) (Jun).
Expectations are for 1.7 pct, down from last month's 1.9 pct.