In December 2009, total sales volume increased by 0.3 percent on the month in England. This was significantly less than expectations of 1.3%. This is another sign that consumers are holding back relative to previous years, even during the holidays. The Office for National Statistics reports it as modest underlying growth. This is disappointing to the markets, especially after all of the stimulus efforts.
Source: Office for National Statistics
The GBP suffered as a result. GBPUSD spiked down on the news, bounced back up, then steadily dropped and reached a new weekly low. EURGBP also saw a similar pattern of GBP weakness, and rallied up against its downtrend. Look for continued GBP weakness into next week. The challenge will be pairing it up with a strong currency. In the short to medium term, look to sell GBPUSD and GBPJPY, as the USD and JPY are benefiting from the current correction.
