Prior to the publication of US advance retail sales figures the Pound was able to advance on the ‘Greenback’ by the most for a month.
While a report showing a slowing in UK house price gains had little impact on Sterling, bets that the Bank of England will increase interest rates next year helped the British asset climb.
GBP/USD gains were also enabled as the US Dollar softened in response to comments issued by Federal Reserve official Stanley Fischer.
Fischer is in line to become deputy Chairman and recently voiced the opinion that with US unemployment remaining a serious concern, the nation needs to continue with stimulus.
He was quoted as saying; ‘At 6.7 percent, the unemployment rate remains too high. Achievement of both maximum employment and price stability requires the continuation of an expansionary monetary policy – even though the degree of expansion is being gradually and cautiously cut back as the Fed reduces its monthly [asset] purchases’.
The US Dollar consequently edged lower against its European rivals, the Pound and Euro.
The safe-haven asset also weakened against boosted Australian and New Zealand Dollars.
However, the ‘Buck’ was able to stage a modest recovery as US retail sales were shown to have increased by more than expected in February.
Sales climbed by 0.3 per cent last month instead of the 0.2 per cent expected and indicated that adverse weather conditions didn’t deter shoppers.
However, January’s sales figure was negatively revised to a decline of 0.6 per cent.
Year-on-year sales were up by 1.5 per cent.
According to a CNBC report; ‘Economists had expected only a marginal increase in retail sales in February after snow and ice blanketed densely populated regions during the first half of the month. Sales are expected to accelerate in the spring as warmer temperatures and improving household finances help to unleash pent up demand.’
The US Dollar was lent further support as US initial jobless claims were shown to have climbed by less-than-projected in the week ending March 7th.
Economists had expected the number of first time benefit claims to increase by 330,000 but they actually rose by 315,000.
Before the weekend UK trade data and construction output reports could inspire more movement in the GBP/USD pairing.
Investors will also be paying particular attention to the US University of Michigan Confidence index.
Last month the gauge advanced from 81.6 to 82, another good increase in sentiment could help the ‘Greenback’ end the week on a high.
US Dollar (CAD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
US Dollar,
,Pound Sterling,0.5984,
US Dollar,,Canadian Dollar,1.1072,
US Dollar,,Euro,0.7166,
US Dollar,,Australian Dollar,1.1044,
US Dollar,,New Zealand Dollar,1.1686 ,
Canadian Dollar,,US Dollar ,0.9042 ,
Pound Sterling,,US Dollar,1.6706 ,
Euro,,US Dollar,1.3951,
Australian Dollar,,US Dollar,0.9059,
New Zealand Dollar,,US Dollar,0.8565 ,
[/table]
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