London View

UK Retail Sales Fall, Sterling at Highest Since Mid-2009

Data from the US on Thursday depicts an improving labour market as weekly jobless claims fell 6,000 to a 312,000 level. Traders are now waiting for June's reading of a manufacturing index from the Federal Reserve Bank of Philadelphia.

Earlier in the UK, retail sales surprisingly fell by 0.5% in May compared to April. Though year on year retail sales were still up 3.9%, May’s drop in retail sales prices comes a day after Bank of England meeting minutes which suggested that the central bank could raise interest rates much sooner than markets previously expected.

In the FX space, the pound fell briefly from its five-year high of $1.7011 but shortly after rose to reach $1.7028, which is its best level since August 2009. The euro meanwhile is up a touch against the USD at around $1.36., the US Dollar being softer after the Fed’s dovish policy meeting.

Elsewhere, oil prices remain high, rising again this session on the back of the geopolitical unrest in Iraq. Brent Crude is up 0.4% at $114.62 a barrel, close to its nine-month intraday high of $114.69 which it reached last week. Oil companies ExxonMobil and BP have launched evacuation programs to get staff out from stations in Iraq as Islamist insurgents attempted to take control of the country’s main oil facility in the north. As a result of this, gold is seeing increased demand due to its safe-haven allure, up around 0.4% to trade around $1,281.55 per troy ounce.