Pound Shrugs Off Consumer Confidence Data

UK Consumer Confidence was unchanged from its 12 year low, according to a survey by polling firm GfK done for the first two weeks of April. After last month’s figure of -34, the lowest it had been since February 2009, the number figure remained the same as UK citizens await the end of the lockdown.

Consumer confidence data is a measure of peoples’ willingness to make major purchases. The lowest figure ever recorded for UK consumer confidence was -39, a figure reached during 2008, during the global financial crisis. The current figure is obviously due to the inability for consumers to make purchases beyond necessities, but it is also due to the fears surrounding the current economic climate and the loss of jobs.

Despite this news, the Pound remained steady for the day’s trading, currently at 1.2350 for the Asian trading session. On the technical side, it fell through the 1.2460 support level from when we last looked at the Pound, and is now looking to trade between 1.2380 and 1.2280.The lack of any major movement from the Pound is most likely due to the lack of change in the consumer confidence figure, even though it continues to be the largest ever decline. In March consumer confidence had dropped by a stunning 27 points. As for this month’s data, analysts at GfK are still hesitant to say whether or not this figure is now stabilised due to consumers becoming adjusted to their lockdown lives, or if further lows are possible.

Investors trading the GBP/USD pair, as well as other Pound currency pairs, are most likely also waiting for the UK Retail Sales report for March, which is due later today.

UPDATE: the UK Retail Sales data has just been released, with a fall of -5.1% for the month of March. This figure exceeded predictions of -4.0%. The Pound has reacted by moving back towards a low of 1.2300. It is currently at 1.2325 against the US Dollar and looking to trade lower.