Sterling drops on July retail numbers

Story link: Sterling drops on July retail numbers

Sterling was lower on Tuesday after new numbers from the British Retail Consortium showed that retail sales were up just 3.1 percent on an annualized basis in July after rising by 5.6 percent in June.

Analysts said that the data was weaker than expected even after factoring in the influence of bad weather during the month and that the numbers could mean that the effect recent hikes in UK interest rates could be beginning to reach the consumer.

The pound was 0.3 percent lower in relation to the euro, to £0.6810, while it dropped 0.5 percent to $2.0210 against the US dollar and fell 0.8 percent to ¥239.25 versus the yen.

The greenback, meanwhile, weakened against the yen after the Federal Reserve decided to leave US interest rates at 5.25 percent again

The dollar was slightly lower, at $1.3766, in relation to the euro, but it dropped 0.5 percent to ¥118 against the yen.

The yen also did well in relation to the Australian and New Zealand dollars, adding 0.9 percent to ¥101.05 and 1 percent to ¥90.05 respectively.

On the other hand, the Australian dollar was 0.6 percent lower versus the US dollar to $0.8535 amid sentiment that the Australian currency could weaken if the Reserve Bank of Australia does not raise interest rates to 6.5 percent as expected when it meets on Wednesday.