Market Commentary and Intraday News

Pound Climbs On Better Retail Sales Data

336 days ago

(RTTNews) - In early European trading on Thursday, the pound strengthened against its major counterparts after the release of better-than-expected domestic retail sales data for May.

U.K. retail sales recovered at a faster than expected pace in May after easing in April, the Office for National Statistics said today.

Retail sales volume, including automotive fuel, rose 1.4 percent from the prior month, when it was down 2.4 percent. The increase was bigger than the expected growth of 1.2 percent.

Excluding fuel, retail sales volume rose 0.9 percent month-on-month, after declining 1.1 percent in the previous month. Economists had expected only 0.7 percent increase.

Sales expanded 3 percent annually, erasing a 0.3 percent percent fall seen in April and better than the 2.7 percent increase forecast by economists.

The pound is now trading at 1.4903 against the franc with 1.495 seen as the next upside target level. The pair finished Wednesday's deals at 1.4860.

Data from the Federal Customs Administration showed that Switzerland's trade surplus surged in May due to an increase in exports.

The trade surplus almost doubled to CHF 2.48 billion in May from CHF 1.25 billion a month ago.

The British unit is now worth 0.8062 against the euro, compared to Wednesday's close of 0.8087. The next upside target level for the pound is seen at 0.805.

Eurozone private sector output shrank at the steepest pace in three years in June, a survey by Markit Economics showed today.

The flash Eurozone Composite Output Index remained at 46, unchanged from May's 35-month low. Economists expected a decline to 45.5.

The services activity index,meanwhile, improved to 46.8 from 46.7 in May. The reading was expected to fall to 46.4.

The purchasing managers' index for the manufacturing sector dropped to a 36-month low of 44.8 in June from 45.1 in May, in line with expectations. The manufacturing output index fell to a 37-month low of 44.4 from 44.6 in May.

Against the US dollar, the pound recovered from an early low of 1.5660 and the pair is now trading at 1.5707. If the pound rises further, it may target 1.575 level. The pair closed yesterday's deals at 1.5719.

The U.K. currency edged up to 125.25 against the yen from yesterday's closing value of 125.05. On the upside, 126.00 is seen as the next target level for the pound.

Looking ahead, Canada retail sales for April, U.S. weekly jobless claims for the week ended June 16, existing home sales for May and house price index for April are scheduled for release in the New York morning session.

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