Worse than expected retail sales data saw the pound weaken by 1.02 cents against the US dollar yesterday, closing the session at the 1.4451 level. Early gains were pared after it was shown that UK retail sales fell 1.9% in February and 0.4% in the year to February. This news out-weighed any gains that were to be made from the news that the rate at which total business investment was falling in the UK had eased, falling only 1.5% in Q4 2008. Improved risk appetite during the US session failed to buoy the pound when investors drew confidence from rallying stocks and commodities. In the US, gross domestic product figures confirmed that the American economy contracted by 6.3% in 2008 whilst jobless claims data showed that there were 624,000 new claimants on top of the 5,560,000 people who continue to receive support.
In today’s trading the pound has continued to slide ahead of the significant announcement of gross domestic product figures in the UK at 09.30 GMT. Also announced in the UK today are Nationwide house prices and current account data. In the US there is a barrage of major economic announcements this afternoon, which includes core personal consumption expenditure, personal income and personal spending figures, as well as the release of the Reuters/Michigan Consumer Sentiment Index.
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