Pound Falls As BoE Broadbent Says Drop In EU Trade To Hurt UK Economy

The pound declined against its key counterparts in early New York deals on Tuesday, after the Bank of England Deputy Governor Ben Broadbent warned that a significant drop in trade with the Europe after Brexit would harm the U.K. and increase costs.

"A significant curtailment of trade with Europe would force the U.K. to shift away from producing the things it's been relatively good at, and therefore tends to export to the EU, and towards the things it currently imports and is relatively less good at," Broadbent said in a speech at the Scottish Council for Development and Industry, in Aberdeen.

"Trade really is mutually beneficial and less of it costs us all," he added.

Broadbent was mum on monetary policy, disappointing investors who had been looking for clues on the likelihood of the BoE rate hike this year.

Data from the British Retail Consortium and KPMG showed that UK retail sales increased in June as consumers spent more on summer clothing and beauty products.

Retail sales grew 1.2 percent on a like-for-like basis in June from previous year, when they had decreased 0.5 percent from the preceding year.

The pound trimmed its early gains in the European session.

The pound fell to near 2-week lows of 0.8874 against the euro and 1.2842 versus the dollar, off its previous 4-day highs of 0.8815 and 1.2927, respectively. The pound is likely to find support around 1.27 against the greenback and 0.90 against the euro.

The pound retreated to 1.2446 versus the franc and 146.79 against the yen, from its early near 5-week high of 1.2518 and a 2-month high of 147.77, respectively. Continuation of the pound's downtrend may see it challenging support around 1.22 against the franc and 142.00 against the yen.

Sterling vs Yen (FX:GBPJPY)
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De Mar 2024 à Avr 2024