Sterling hits 7-month high against dollar

Reuters London | Updated on January 24, 2018

Sterling hit a seven-month high against a broadly weaker dollar on Thursday after better-than-expected UK retail sales data, which followed strong wage growth numbers and hawkish comments from a Bank of England policymaker.

Though Thursday’s figures showed retail sales growth slowed sharply last month as shoppers bought fewer clothes, they came in slightly better-than-expected on a month-on-month basis.

The numbers came after a bumper 24 hours for sterling, which hit a seven-year high against a trade-weighted basket of currencies on Wednesday after data showed British workers’ pay grew at its fastest rate in nearly four years in April.

On Wednesday evening, BoE policymaker Kristin Forbes had said the next move in interest rates would be up and that it would come in the “not-too-distant future’’, as wage growth continues to pick up pace.

Sterling rose to $1.5930 after the retail sales data, from $1.5904 before its release, before weakening a touch to $1.5896, still up 0.4 per cent on the day. Against the euro it was flat at 71.67 pence.

UK government bond futures briefly edged up after the data. September futures touched a high for the day of 116.39 before pulling back to 116.27, flat with levels just before the numbers were released.

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Published on June 18, 2015
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