GBP Weakens On Poor Retail Sales

http://ashraflaidi.com/forex-news/gbp-drifts-on-poor-retail-sales

Chinese GDP rose y/y but slowed q/q; British retail sales fell; USDJPY at 100 would not cause inflation fears according to PM Abe's advisor. Market turns to Canadian retail sales and UoM consumer confidence.

The greenback is stronger against all majors except CHF and JPY. European equities are trading within narrow ranges and relatively weakest are CAD and GBP.

Chinese Q4 GDP accelerated to 7.9% on annual basis from previous 7.4%, which is slightly more than analysts expected. However, q/q growth slowed to 2.0% from previous 2.1%. AUDUSD that usually reacts the most to Chinese releases ignored the improvement and trades around 1.0505 about 50 pips below today's highs at 1.0558.

GBP is weaker across the board after British retail sales disappointed as they declined 0.3% in December from previous 0.2% growth while the core figure fell 0.1% from a previous flat reading. GBPUSD fell to 1.5923 and EURGBP rose to 0.8386.

JPY pairs are consolidating yesterday's large gains amid expectations for new easing next week. Koichi Hamada, an advisor to PM Abe said today that even if USDJPY rose to 95 or 100 it would not cause inflation fears. Nikkei 225 closed the day 2.86% higher and USDJPY trades around 89.85.

The data calendar for the US session is light as it only contains Canadian manufacturing sales at 8:30 am ET that are expected to rise 0.9% in November from previous -1.4% and the university of Michigan consumer confidence at 9:55 am, which is seen higher in January at 75.1 from prior 72.9.

Patrik Urban