Sterling rises, shrugs off un­ex­pected weaker Au­gust sales data

The Pak Banker - - COMPANIES / BOSS - LON­DON -REUTERS

Sterling rose on Tues­day as the dol­lar slipped and in­vestors shrugged off an un­ex­pected drop in Bri­tain's monthly re­tail sales data.

The dol­lar fell af­ter in­vestors re­turned to riskier cur­ren­cies as a suc­cess­ful phone call be­tween top trade of­fi­cials in the United States and China boosted pos­i­tive sen­ti­ment. Sterling was last up 0.4% at $1.3122 ver­sus the green­back. It was lit­tle changed at 90.195 pence ver­sus the euro.

"It's much more about gen­eral risk sen­ti­ment and I think that's why sterling is do­ing well this morn­ing," said Morten Lund, an an­a­lyst at Nordea Mar­kets. The pound rose in spite of the monthly re­tail sales bal­ance fall­ing to mi­nus 6 in Au­gust, ac­cord­ing to data from the Con­fed­er­a­tion of Bri­tish In­dus­try, far be­low fore­casts in a poll of economists which had pre­dicted plus 8.

A note from ING an­a­lysts had ear­lier said the data, which also re­vealed job changes sank to their low­est since Feb 2009, could lead to a tem­po­rary boost for the pound.

In­ter­na­tional cen­tral bankers, Fed­eral Re­serve of­fi­cials, aca­demics and some pri­vate sec­tor an­a­lysts will meet vir­tu­ally on Thurs­day and Fri­day be­cause of the COVID-19 pan­demic, in­stead of in the moun­tain re­sort of Jack­son Hole, Wy­oming.

"The whole ap­proach has been mostly wait and see ahead of the Jack­son Hole sym­po­sium," said Francesco Pesole, FX strate­gist at ING. Sterling still has to grap­ple with on­go­ing Brexit ne­go­ti­a­tions be­tween Bri­tain and the EU, which are far from reach­ing a con­sen­sus.

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