Sterling volatile but still trading up
The UK produced mixed economic data this morning that moved the £ on release. First up, retail sales figures for September missed estimates showing a 2.6% drop year-on-year. In-store sales remain subdued, but economists hope the upcoming 'golden quarter' (Christmas shopping) will change that.
Sterling did lose around 0.3% when the data broke, but managed to claw that back once the PMI's came in. UK business activity regained some momentum after a poor previous 3-months. The figures for October easily beat estimates with the expansion owed once again to the services sector. Services look like they are in a bit of a 'sweet spot' at the moment, but with covid cases on the rise and winter closing in, momentum may stall.
Looking at the weekly charts on the Pound and there has certainly been increased volatility this week. The good news is, the £ has bounced back each time a dip has occurred. Not only that, the ranges have been tight and on the upper levels (£-€1.1810-1.1860 & £-$1.3710-1.3830 mid-market). Another good week of trading for Sterling.