The British pound has drifted lower midway through the European session, brushing off better than expected retail sales figures but some predict that the currency is reaching a bottom and now may be the time to get in.
At 2.07pm (GMT) the British currency was trading at $1.2882 down slightly down from $1.2890 in yesterday’s close.
The latest retail sales figure from the UK hit the market at 0.3 percent against analysts’ expectations for a number of 0.2 percent although the yearly figure missed consensus coming in at 1.3 percent against market predictions for a number of 1.4 percent.
This is now the 2nd time in consecutive days the market has seen positive data from Britain following on from yesterday’s jobs figures,
“It was again some good news for sterling. The labor-market report yesterday and today’s retail sales both came in above expectations” said Georgette Boele, a currency strategist at ABN Amro Bank NV in Amsterdam.
With the pound now under $1.29 some say it is a good time for buyers as the underlying factors show an undervalued currency,
“Sterling looks extremely undervalued on most measures. Brexit will change the UK’s current trade relationship with the EU, but everything has its price." noted Dean turner of UBS Wealth Management
"Indicators for the manufacturing sector show that the weaker currency is boosting export demand. It should also make the UK a relatively attractive place for foreign companies to invest. Political noise ebbs and flows and, with it, exchange rates." He added