Pound Advances As U.K. Retail Sales Improve
May 21 2015 - 6:02AM
RTTF2
The pound drifted higher against the other major currencies in
European deals on Thursday, after data showed that U.K. retail
sales rose more-than-forecast in April, raising hopes that
Britain's economic growth may accelerate in the second quarter.
Data from the Office for National Statistics showed that the
volume of retail sales including auto fuel expanded 1.2 percent
month-on-month reversing a 0.7 percent fall in March. Sales were
expected to grow 0.4 percent.
Likewise, excluding auto fuel, sales increased 1.2 percent after
staying flat in March. Economists had forecast a 0.2 percent rise
for April.
Including auto fuel, retail sales growth accelerated to 4.7
percent on a yearly basis in April from 4 percent in March and
exceeded a 3.7 percent rise forecast by economists.
Retail sales excluding auto fuel also grew 4.7 percent, but
slightly slower than the 4.8 percent increase seen in March. Sales
were expected to rise only by 3.7 percent.
The U.K. stock market also rose, as miners gained after the
release of Chinese manufacturing data. The FTSE 100 index rose 0.10
percent or 7.2 points to 7,015.
Investors look forward to a 2-day EU summit in Riga, where Greek
Prime Minister Alexis Tsipras is scheduled to hold talks with
German Chancellor Angela Merkel and French President François
Hollande, in an attempt to find a solution to secure bailout
aid.
The pound was trading mixed in the Asian session. While the
pound held steady against the greenback and the yen, it declined
against the franc. Against the euro, it rose.
The pound spiked up to 1.4613 against the Swiss franc, its
strongest since April 29, from an early low of 1.4519. The pound is
seen finding resistance around the 1.50 mark. At yesterday's close,
the pair was worth 1.4554.
The pound rose to a 2-day high of 1.5663 versus the dollar,
while approaching 189.46 versus the yen, its highest level since
December 8. The next likely resistance for the pound may be located
around 1.58 against the greenback and 192.00 against the yen.
The pound advanced to a new 2-month high of 0.7114 against the
euro, up from a low of 0.7166 hit 3:45 am ET. On the upside, 0.70
is seen as the next possible resistance for the pound. The pair was
trading at 0.7138 at yesterday's close.
The flash data from Markit showed that the Eurozone economy lost
growth momentum for a second successive month in May.
The composite Purchasing Managers' Index dropped to 53.4 in May
from 53.9 in April. The reading was expected to remain unchanged at
53.9.
Looking ahead, the European Central Bank's account of the
monetary policy meeting of the Governing Council held on April 14
and 15 is due shortly.
The U.S. weekly jobless claims for the week ended May 16,
existing home sales and leading indicators for April, Markit's
preliminary manufacturing PMI for May and Eurozone flash consumer
sentiment index for May are set for release in the New York
session.
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