Yahoo Finance Forex- Sterling Surges on Retail Data
Investing.com - Sterling was higher on Thursday after UK retail sales came in higher than expected, boosting confidence in the economy.
UK retail sales rose 1.6% in April, compared to expectations for a 0.1% gain, the Office for National Statistics reported. The unexpected increase indicates consumer confidence in the UK economy, despite political uncertainty surrounding Brexit.
GBP/USD surged 0.46% to a one-day high of 1.3410 as of 4:43 AM ET (8:43 GMT).
The euro was also higher, but was held back by economic and political worries in Europe. The Euro Zone Composite Flash Purchasing Managers Index fell to an 18-month low in May, indicating stagnating economic growth. Investors are also concerned by politics in Italy, where anti-establishment 5-Star and far-right League could put eurosceptic officials in power. The EUR/USD rose 0.42% to 1.1744.
Meanwhile, the greenback fell after an unexpected dovish-tone in the latest Federal Reserve meeting minutes.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.30% to 93.63.
Fed meeting notes suggested that while another interest rate hike is warranted, the central bank would accept inflation rising above its target rate for a while.
This was a surprise to investors, who expected that the Fed will increase interest rates and tighten monetary policy in the coming months. The Fed raised rates in March and is expected to raise rates twice more, with a 95% chance of a hike in June.
The dollar was down against the safe haven yen, with USD/JPY falling 0.35% to 109.69. Elsewhere, the Australian dollar was higher, with AUD/USD up 0.05% to 0.7564 while NZD/USD increased 0.01% to 0.6916.
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