Thursday’s economic calendar was a relatively quiet one with the UK taking centre stage again. In early trading the latest Retail Sales figures were announced with a sharp drop expected from last month. April’s figures were particularly impressive with 1% growth and 6.5% on the year, however May’s figures have seen a -0.5% growth and the yearly figure has been cut to 3.9%, 0.4% less than analysts’ expectations. This saw an initial drop in sterling exchange rates but with the positive sentiment still rife in the market, these losses were recovered as the day developed.
In particular GBP/USD saw the best gains reaching a new high for the year as exchange rates test key resistance points. The US Dollar came under pressure yesterday against both the pound and the Euro after the Federal Reserve cut its growth forecast from 2.8-3% this year, down to 2.1-2.3%.
There were also 2 interest decisions to talk about yesterday for Norway and for Switzerland. Both countries held rates at their respective levels. Norway however made a statement postponing any rate changes for another year which immediately weakened the NOK by around 1.5%. The Swiss Franc however gained some strength following its rate hold, a good example of how unpredictable currency movements can be following data releases.
Today we have Public Sector Net Borrowing figures at 9:30am for the UK, which are again forecast to have worsened from last month. The only other data today is Canada’s inflation figures this afternoon at 1:30pm. To discuss how to take advantage of the current peak rates for buying foreign currency, speak to your broker today and ask about forward contracts.