UK online retail sales grew by 8.3% in July, on a yearly basis, according to a survey published by the British Retail Consortium (BRC). However, a slowdown in the growth of online sales was observed since in June the reading was at 10.2%. Despite the fact that Britain ranks 31st in the world for broadband internet speed, lagging most of Europe, it seems that the online retail sector in the UK is expanding.

In the Eurozone, Germany’s trade surplus increased in July, marking a ten-month high. Germany’s exports and imports shrank, missing analysts’ expectations. An ING report said that the recent appreciation of the Euro has created the fear that a stronger currency may harm the German economy. However, ING analysts suggest that strong confidence indicators point to a continuation of recovery.

Pound Sterling – UK Markets

Today, Sterling gained a bit of ground against the US Dollar with the exchange rate set at $1.30. The Pound retreated against the Euro, with the exchange rate set at €1.10. With no significant economic data coming out of Britain, investors and traders are waiting for the release of data regarding the UK’s trade balance and the industrial production on Thursday.

Ross McEwan, the head of the Royal Bank of Scotland (RBS), said in an interview that victims of bank fraud should not expect automatic refunds. McEwan said that it would be too costly to cover all the losses deriving from online fraud activities. The RBS’ chief executive noted that it wasn’t the bank’s responsibility if its clients share their account details or send money to unknown online receivers. The Financial Conduct Authority (FCA) rules say that state banks must refund victims of frauds, unless negligence is proved.

The BRC released a report which showed that there has been a slowdown in retail sales growth in July with non-food sales retreating as household budgets are getting squeezed by inflation and sluggish wage growth. According to the report, UK retail sales increased by 0.9% in July, on a yearly basis, 0.3% less than in June. Paul Martin, UK head of retail at KPMG, commenting on the report said that retailers shouldn’t count on a sustained pickup in sales.

US Dollar – US Markets

The US Dollar dipped against the Euro with the exchange rate set at €0.84. The US Dollar Index (DXY) which measures the value of the US currency against six major currencies also fell, but remains still above the 15-month low recorded last week.

Market analysts are giving less than 50% chance for an additional hike of the Fed’s benchmark interest rate during 2017. Despite the positive data regarding employment and wages, which were published on Friday, experts are keeping their expectations low. St. Louis Fed President James Bullard delivered a speech saying that the Federal Reserve should leave interest rates at the current level, because inflation is not likely to rise much, even if the labour market continues to improve.

Bullard said that recent readings of lower inflation are “concerning” because they may not be temporary, but indicative of persistent factors, such as improving technology that is driving down the price of goods and service. The Personal Consumption Expenditures (PCE) price index, which is the Fed’s preferred gauge of inflation, has been running at 1.5%, away for the Fed’s target of 2%, in recent months.

Euro – European Markets

The Euro edged up against the US Dollar with the exchange rate set at $1.18. The single market currency strengthened despite the negative trade data coming from Germany.

German exports shrank by 2.8% in June against the 0.3% decrease that analysts were expecting. This was the biggest monthly drop since August 2015. Imports fell by 4.5% during June, which is the biggest decline since January 2009. Analysts were expecting that imports would rise by 0.2% in the first summer month.

Germany’s trade surplus came at €21.1bn which is a ten-month high, €0.8bn more than May’s reading. It is certain that the increased German trade surplus will raise criticism in the Eurozone and the US because German trade policies have been accused of destabilising the global economy.

Other Currencies – Highlights

The Pound slumped against the Australian Dollar, trading at 1.64 AUD. The National Australia Bank (NAB) published a business survey which said that business conditions remained elevated in July and that business confidence increased. According to Westpac’s analysts commenting on the survey, the Australian economy is experiencing a trend improvement in underlying conditions, after the slowdown in mid-2016. They note that retail sales, exports and the number of jobs have increased, supporting the view that the economy is rebounding in 2017.

Sterling edged up against the New Zealand Dollar, trading at 1.77 NZD. An ANZ report suggests that the Reserve Bank of New Zealand (RBNZ) will want to see broader inflation pressures before it considers shifting off its ultra-neutral stance. Westpac released a report on Thursday’s board meeting, which says that the RBNZ will keep its benchmark interest rate on hold at 1.75%. The report notes that the RBNZ’s policy guidance will be more dovish than in May, because developments have been net negative to its forecasts.