What’s been happening?

Pound Sterling – UK Markets 

The British pound continued to gain value against both the dollar and the euro on Thursday following the upbeat macroeconomic data releases from the UK.

The UK’s Office for National Statistics (ONS) reported that retail sales in July increased by 0.2% on a monthly basis and beat the market expectation for a decline of 0.2%. On a yearly basis, the growth rate came in at 3.3% compared to analysts’ estimate of 2.6%. Excluding fuel, retail sales rose 2.9% annually. “In the three months to July 2019, the quantity bought in retail sales increased by 0.5% when compared with the previous three months, with food stores and fuel stores seeing a decline,” the ONS said in its press release.    

US Dollar – US Markets

The greenback posted gains against the euro for the third straight day on Thursday but couldn’t outperform the sterling. The data published by the US Census Bureau revealed that retail sales in July rose by 0.7% to surpass experts’ forecast of 0.3%. Excluding cars, retail sales grew by an impressive 1% to help the currency gather strength. Commenting on the data, “The United States is now, by far, the biggest, strongest and most powerful economy in the world, it is not even close! As others falter, we will only get stronger. Consumers are in the best shape ever, plenty of cash. Business optimism is at an all-time high!" US President Donald Trump tweeted out.

Other data from the US showed that initial jobless claims increased to 220,000 in the week ending August 9 while the NY Fed’s Manufacturing Index improved to 4.8 in August from 4.3 in July. “New orders increased after declining for the prior two months, and shipments continued to expand,” the NY Fed noted in its publication. “Unfilled orders fell, delivery times were steady, and inventories increased.” Finally, the Philly Fed Manufacturing Index edged lower to 16.8 from 21.8 but came in better than the market expectation of 10. 

Euro – European Markets

The euro suffered losses against its major rivals on Thursday despite the fact that many European markets were closed due to the Assumption Day holiday. Disappointing macroeconomic data releases from the eurozone and Germany earlier this week allowed the selling pressure on the shared currency to remain intact.

Later in the day, in an exclusive interview with the Wall Street Journal, the European Central Bank's rate-setting committee member Olli Rehn said that the stimulus package the bank will announce in September could surprise investors. "It's important that we come up with a significant and impactful policy package in September," Rehn told the WSJ and argued that they would rather overshoot on stimulus rather than undershoot to point to an aggressive shift in the policy outlook and put additional weight on the euro’s shoulders. 

What’s coming up? 

UK: There won’t be any macroeconomic data releases from the UK on Friday. 

US: The only data from the US will be the University of Michigan’s Consumer Confidence Index, which is expected to edge lower to 97.2 from 98.4

EU: The Eurostat will release the trade balance data on Friday.