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The CBI’s realised sales report – a barometer of high street trade – came in with a reading of 34 in September, a significant jump from August’s level of 27 and comfortably beating analysts’ estimates of 24.
The realised report covers 20,000 outlets, which make up a large component of the retail sales data, so the result is often a good indicator for the official UK retail sales. Dealers bought the pound after the announcement, as it‘s further proof that the UK economy is gaining momentum.
At 3pm (London time), the latest US new home sales are released, with economists estimating an increase of 28,000 on the month. If the report beats expectations, the pound may head towards the $1.60 level.
Last week’s Federal Reserve decision to keep US stimulus package at $85 billion per month has kept the US dollar under pressure, with traders on the lookout for any clues ahead of the Fed’s next meeting. With the US central bank’s members divided over when tapering should start, the new home sales report will be the latest indicator.