It has been a positive day for Sterling with the pound gaining against most of the other major currencies. GBP/USD was no different and following better than forecast UK retail sales figures the currency pair climbed back over $1.69 for a brief time this morning.
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Sterling/dollar rose nearly a cent during trading today as UK retail figures posted their biggest annual rise for ten years. UK sales grew by 6.9% in April compared to the same month last year and figures posted by the Office of National Statistics also showed there was a rise of 1.3% between March and April, beating forecasts by 0.8%. The news had an immediate impact on the currency markets with GBP/USD rising from $1.6850 to a high of $1.6916 in a matter of minutes.
What could affect rates over the next few days?
Later today we have a speech from Fed Chair Janet Yellen, this could cause some movement in the FX markets as investors look for clues over future monetary policy, this could include hits about tapering or future interest rate rises.
Tomorrow is a busy day in terms of data releases for the UK and the U.S. From the UK we will see the second GDP estimate for Q1 along with public net borrowing and CBI industrial orders. Any amendment to the GDP figure is likely to affect the value of the pound, a reading over 0.8% could push GBP/USD back towards $1.70.
From the States we will see the latest unemployment claims, flash manufacturing and existing home sales numbers. Anyone looking to sell dollars will be hoping for a strong performance from the U.S for the remaining part of the week as they look for the dollar to try and claw back some of the ground it has lost to the pound over the last few weeks.
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