- The Pound is sharply lower across the board after UK retail sales slow rapidly in January.
- The US Dollar is stable yet vulnerable after Donald Trump's hour long press conference yesterday.
- Marine Le Pen gathers momentum as latest opinion poll shows a sharp rise to 40% in round two.
The UK retail sales figures for January released today were extremely disappointing, with sales in January dropping by 0.3%, against an expectation of an increase of 0.9%. Prices on the high street rose at the fastest rate since mid-2013. The significant rise in prices are being blamed on the weaker Pound.
The US Dollar looks like it has reached the end of it's recent bull rally and may be vulnerable in the weeks and months ahead. Concerns over policy under the new president is currently outweighing the prospects of another couple of rate hikes in the U.S. before the end of 2017.
The Pound has been heavily sold today after UK retail sales figures were released at -0.3%, against an expectation of a 0.9% rise. Prices rose at the fastest pace since mid-2013, causing consumers to reconsider purchases. This comes as no surprise due to the weaker Pound, however the pace of decline is what caused the sharp selloff in the Pound.
On the Euro front we have seen little change in the major themes over Greek debt bailout talks and Marine Le Pen's rise in the polls. The Euro is currently keeping out of the spotlight, and therefore we are not seeing too much volatility in the single currency. In the latest polls, Marine Le Pen has moved to 40%, from 26%, in the first round.
The Loonie is stronger and has been halted, even though crude prices continue to move higher. The Loonie has lost it's shine as investors have concern around trade and policy in Canada, the neighbor and trading partner of the U.S.
The Aussie Dollar looks set to end the week marginally higher, but has been range bound for much of the week. The Oz Dollar is up over 5% this year as iron ore prices have surged higher which is helping the country’s exports.
The South African Rand ends the week close to a 4-year high against the Pound. Investors are buying the Rand as part of the 'carry trade' by borrowing cheap money in major markets, and investing it in ZAR at a healthy rate of return.