Sterling weakens on sales data

Sterling was weaker on Thursday after gains last week in the wake of the Bank of England’s surprise move to raise UK interest rates. Even though most analysts expect the Bank or hike rates one more time this year, new data that show inflation up less than expected for both producers and customers, higher than expected unemployment numbers, and lower retail sales all have some less than convinced that another rise in rates is coming anytime soon. Retail sales were down 0.3 percent in July, against a predicted 0.2 percent rise in buying.

The UK currency was 0.1 percent lower against the US dollar to $1.8937, while it dropped 0.3 percent versus both the euro and the Swiss franc to £0.6795 and SFr2.3228 respectively and was down 0.5 percent in relation to the Japanese yen, to ¥218.53.

Other major currencies saw little movement. The yen did manage to gain 0.2 percent to ¥148.50 against the euro. Among other Asian currencies, the Chinese renminbi added 0.25 percent to Rmb7.9686 to the dollar.

The Australian dollar weakened on the session, dropping 0.4 percent to A$2.4788 in relation to sterling. The Aussie was 0.5 percent lower versus the greenback to $0.7635 and it fell 0.9 percent to ¥88.11 against the yen.

In Europe, the Norwegian krone was down after its central bank raised interest rates by a quarter point on Wednesday, dropping to NKr8.1132 versus the euro and to SKr1.1244 against the Swedish krona.

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