Sterling Sinks Against Euro

 

The euro was buoyed by political uncertainty in Britain, with investors expecting the country’s exit from the European Union putting pressure on growth and keeping the pound weak. All eyes were focussed on the third round of Brexit negotiations between David Davis and European Union’s chief negotiator Michel Barnier, which started on Monday, with Barnier saying he was concerned at the tardy progress of the talks.

The weakness in the pound has been further exacerbated in recent weeks on concerns that Theresa May could be replaced as Prime Minister and Tory leader at the Conservative Party’s autumn conference in October, creating fresh political turmoil. EURGBP is currently hovering around the 0.92600 zone after touching a high of 0.93060 on Tuesday.

Retail sales in Japan grew for a ninth straight month in July, data from the trade ministry showed early Wednesday. However, the pace of growth slowed, as consumers spent less on clothes and cars. Sales edged 1.90% higher in July from the year ago period, topping the median estimate for a 1.00% annualized rise, but slower than a revised 2.20% gain in the prior month.

Spending growth on clothes decelerated to an annual 3.50% in July from 5.30% in June. Spending on cars rose 6.60% in July from a year earlier, which was also slower than an 8.70% annual increase in June. Economists reckon consumer spending is likely to pick-up amidst the tightness in the labour market. EURJPY was last trading around the 131.45000-mark.