Summary:

• GBP sinks on another data miss

• European equities push lower on Thursday

• US dollar rallies after Powell hearings

The UK retail sales report stole the show on the Thursday morning sending GBP to multi-month lows. Elsewhere, European equities are trading lower with steepest declines once again seen on the Russian stock market. USD soars being the top performing currency in the G10 basket while NOK and NZD account biggest losses. Commodities are pulling back amid the greenback strengthening. The biggest sell-off can be seen among industrial metals.

Jerome Powell, head of Federal Reserve, criticized digital currencies yesterday. He said that cryptocurrencies should not be considered real currencies. Fed chair reminded “relatively unsophisticated investors” about risks connected to virtual currencies during hearings in Congress. Moreover, Powell claimed that cryptocurrencies may serve as a great tool to hide or launder money.

The British pound has gotten a double whammy so far this week as both inflation and retail sales came in well below expectations in June. The sole bright spot for the pound seems to have been the labour market report. Nevertheless, despite disappointing releases the likelihood for a rate increase in August has not changed too much, and it basically sticks to roughly 80%.

It has been more than two years since Britons voted “exit” and in around 250 days the UK will leave the EU. Despite such a little time left the Brexit deal still has not been struck and the ongoing turmoil in the UK politics does not bode well for deal surfacing any time soon.

The most important point coming from Asian hours trading is undoubtedly the labour market report from Australia. The release came in well above expectations sending the Aussie much higher overnight. The increase has erased to some extent since then, however, the Aussie is holding the first place in terms of the best performing major currencies in the morning.