Market Overview

Strong UK sales data halted GBP decline

The GBP has halted its decline against the dollar on strong retail sales data for March.

The Office for National Statistics reported a 5.4% m/m rise in sales last month and a 7.2% rise on the same month a year earlier. Stronger than expected (1.5% growth was forecast), they indicate that the UK is returning to normal consumption faster than economists expected.

This is a clear indication that households and businesses have adjusted to the lockdown restrictions and are quickly getting back on track amid a massive vaccination campaign.

The British pound remains below 1.3900 for now, hovering around the 50-day average, which plays the role of a short-term trend.

Earlier in the week, the Bank of Canada made another move to roll back coronavirus support measures. It could well be that the Bank of England will also be among the first of the developed economies to start to return to normality thanks to strong fundamentals.

And that would be good news for the GBP as well as the UK stock market.

The FxPro Analyst Team

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