FX round-up: Positive retail sales figures fail to excite GBP traders

Figures released by the Office of National Statistics this morning showed an increase in month-on-month UK retail sales, with a print of 0.6% and year-on-year sales at 2.9%. Both figures beating market forecasts of 0.4% and 2.5%, respectively.

Sterling failed to find confidence against the dollar only managing to hit a high of 1.3020 before sellers took control driving the pair lower to a daily low of 1.2933.

Cable has since pared earlier losses and managed to hold ground at 1.2970 as at 1700 BST.

Retrospectively, traders may be looking to digest information/news from the second round of Brexit talks in Brussels today for clues as to the possible direction of future negotiations.

The euro was the shining star today, gaining ground against the dollar on the back of favourable comments out from Frankfurt where ECB President Mario Draghi expressed concerns about inflation and stated that talks concerning the quantitative easing programme would take place in the Autumn.

Although no specific details were given, it was clear to see what market participants thought of his comments, pushing the single currency higher against the dollar from 1.1484 to the day high of 1.1660 in the space of two hours. Holding its ground, the euro trades against the dollar comfortably at 1.1630 as at 1700 BST.

As expected, no policy change was announced from the Bank of Japan (BoJ) today, with the bank deciding by a 7-2 majority to continue purchasing Japanese government bonds (JGBs) at more or less the current pace and maintaining a negative interest rate of 0.10%.

Traders seemed to pay no mind to status quo stance of the BoJ at the time of the press conference and pushed usd/jpy to achieve a day high of 112.43 by 10:00 BST. Come the afternoon session and sentiment changed for the pair which continued its daily move lower (initiated on 11 July) to hit the daily low of 111.48 by 1600 BST.