Data on retail sales in the UK surpassed the most bold expectations, as their growth rates accelerated from 1.3% to 1.4%, while the slowdown was predicted to be 0.1%. Moreover, American statistics proved to be extremely weak. The number of applications for unemployment benefits increased by 40,000, , which was worse than the forecast of 39,000. However, the reduction in the number of initial applications was expected, but it increased. Also, sales of housing on the secondary market declined not by 0.2%, but by 2.5%. However, all this were not enough to grow the pound, which pulled a single European currency, as the content of the text of the minutes of the ECB's meeting on the monetary policy left little doubt that the regulator will extend the quantitative easing program.
Today, the preliminary data on GDP of the U.K. for the first quarter is coming out, and they should show a slowdown in economic growth from 1.4% to 1.2%. Also, investment growth rates are expected to slow from 2.6% to 2.4%, so that the pound clearly has no reason to be happy. However, the U.S. forecasts a reduction in orders for durable goods by 1.4%. Thus, the pound is likely to consolidate at 1.3375.
