Pound stronger on retail sales

Story link: Pound stronger on retail sales

The pound strengthened Thursday on a report from the Office for National Statistics which revealed that UK retail sales were up 3.5 percent in May against an expected decline.

The UK currency was also helped by comments from Bank of England Governor Mervyn King yesterday that the Bank of England’s Monetary Policy Committee will do whatever is necessary in order to pull inflation back to the Bank’s target of 2 percent.

In midday trade in New York the pound traded at 78.51p to the euro and it took $1.9742 to buy a pound.

The US dollar, meanwhile, gained on the euro as the gains in UK retail sales sent investors selling the euro in order to buy the pound.

At just past noon in New York the dollar was trading at $1.5500 to the euro, with gains limited after the Philadelphia Federal Reserve reported that it’s general index had dropped to minus 17.1 this month, indicating that manufacturing activity in the region had contracted even more since May.

The Swiss franc, meanwhile, weakened in relation to the euro and the US dollar after the Swiss National Bank left interest rates there steady at 2.75 percent and after the Bank’s president made comments indicating that inflation is likely to fall below the Bank’s 2 percent target after going to 2.9 percent in May.

The franc traded at SFr1.6223 to the euro and at SFr1.0467 to the US dollar at midday in New York.

Rising prices for commodities sent the Australian and New Zealand dollars higher in relation to the US dollar, with the greenback trading at 94.97 cents US to the Australian dollar and at 76.13 cents US to the New Zealand dollar.