Pound weakens as UK retail sales slump exceeds expectations
SPY•Sterling weakened after UK retail sales fell more than expected, while currency moves elsewhere reflected oil prices, bond yields and expectations for interest rates.
1. Currency moves
The pound faced pressure after a larger-than-expected slump in UK retail sales, leaving sterling vulnerable if October’s services PMI disappoints. The euro weakened as French bond yields exceeded 5%, a 24-year high, while analysts lowered growth expectations for 2026 and 2027. Surging oil prices lifted safe-haven demand for the US dollar, reinforced by an unexpected decline in initial jobless claims. The Canadian dollar rose with oil prices, but an expected sharp slowdown in retail sales threatened further gains; New Zealand’s dollar strengthened as investors priced in a Reserve Bank of New Zealand rate hike next week despite underwhelming inflation.
