The Pound (GBP) rocketed higher yesterday morning following the release of better than expected UK Retail Sales figures for April.
Data published by the ONS revealed that sales leapt from -1.4% to 2.3% last month, their highest level of growth since January 2016 and outpacing forecasts for a rise of 1.0%.
However, Sterling failed to stabilise at its best levels, plummeting again in the evening, with some analysts describing the drop as a ‘mini flash crash’ as there appeared to be little data to support such a dramatic slide.
The Pound Euro (GBP EUR) exchange rate initially soared on Thursday following the impressive UK retail sales figures before retreating again by the end of the session.
The single currency was also able to slow Sterling’s advance thanks to a surprise fall in France’s Unemployment Rate, which fell from 10% to 9.6% at the start of 2017, the first time it has fallen below double digits since 2012.
The Euro may rise again this afternoon with the release of the Eurozone’s latest Consumer Confidence data, with household sentiment expected to rise from -3.6 to -3.0 this month.
Sterling broke past $1.30 against the US Dollar (USD) for the first time since September as markets remained wary of the political scandal engulfing the Trump administration.
The ‘Greenback’ was able to rally in the evening however following a hawkish speech by Cleveland Federal Reserve Bank President Loretta Mester in which she repeated calls for her colleagues to approve further rate hikes this year, sending the market odds of a June rate hike soaring once again.
CME’s FedWatch tool now places the odds of a rate hike at 78.5% up from around 60% before the speech by Mester.
The Pound Canadian Dollar (GBP CAD) exchange rate also found its gains short lived on Thursday with Sterling tumbling in the afternoon as the ‘Loonie’ was strengthened by the continued rise in oil prices following growing optimism that OPEC will agree to extend its production cuts until the end of the year.
Sterling also stumbled against the Australian Dollar (AUD) on Thursday, losing around half of its gains from the retail sales report as the British currency was hit by a mysterious ‘flash crash’.
New Zealand Dollar
While the Pound also stumbled against the New Zealand Dollar (NZD) yesterday evening, the pairing was able to trend higher again this morning as the ‘Kiwi’ lost its footing.
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