UK consumers defy the odds yet again!
This morning's UK retail sales figures have beaten downbeat expectations again with March spending up 1.1% - core 1.2% against median forecasts for a 0.3% drop in each case. The anecdotal evidence has pointed to weakness in these numbers, with a number of banks warning of underperformance here, but at present, consumers are happy to spend and there seems to be little sign of Brexit fear.
However, Brexit fears are hampering any recovery in GBP, and under normal circumstances, these numbers would have pushed Cable much higher, though EUR/GBP is showing its familiar resilience again and the reaction is tight, to say the least.
If Cable is to hold and sustain a move above the 1.3000-1.2950 zone, then we need to push for a move above 1.3125 over coming sessions, so until then, we expect to be range bound until Brexit news can provide a fresh catalyst, either way.
EUR/GBP for now continues to maintain a firm hold on the 0.8600 handle, though sellers were apparent well ahead of 0.8700 and so sideways trade is the best we can expect here for now.