Forex Weekly Round Up 7 September 2015 – 11 September 2015

Retail sales in the Eurozone rose again in August, although the pace of increase slowed down from the previous month, figures released last Friday showed. The index fell from to 51.4 in August from July’s 54-month high of 54.2, but remained above the 50 threshold that signals expansion for the fourth consecutive month.

Prime Minister David Cameron suffered an embarrassing defeat in parliament on Monday over how the referendum regarding leaving the European Union will be conducted. In Monday’s vote euro-skeptics teamed up with MPs from the main opposition Labour party and the Scottish National Party to vote down the move, which they saw as a key test of the government’s willingness to address their concerns.

Retail sales figures in the UK disappointed on Tuesday after being hit by the late timing of the bank holiday. Total UK sales were barely changed, up 0.1% compared with the same month last year, while like-for-like sales, which exclude new store space, fell 1.0%.

Manufacturing production fell unexpectedly throughout July, as did the UK’s industrial output. Manufacturing production decreased by a seasonally adjusted 0.8% in July. It was expected to gain 0.2% following a previous 0.2% increase earlier this year. Annual manufacturing production fell at a rate of 0.5%.

The Pound strengthened on Thursday afternoon after Bank of England Governor Mark Carney said the UK’s economic outlook remains healthy and market turmoil related to China’s slowdown hasn’t shaken their view that the time for a rate increase is approaching. At their September meeting, the nine-member Monetary Policy Committee said it’s too early to draw clear conclusions about developments overseas, a sign they remain focused on withdrawing emergency stimulus that’s been in place since 2009.

While the panel voted 8-1 to keep the key interest rate at 0.5%, with only Ian McCafferty dissenting, economists again forecasted a BOE rate increase in the first quarter of next year.

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