Daily currency report

The sterling hit a seven-day high against the dollar and was also up versus the euro after surprisingly strong retail sales data. Elsewhere, the US dollar had come under pressure following a disappointing Philadelphia Fed business activity index which showed factory activity slowed further in June, however any losses were capped by a sharp fall in the price of oil, which fell back by some $5 per barrel.

Sterling (GBP)

The pound received a timely boost as data showed that British retail sales soared in May at their fastest monthly rate since the series began in 1986. The figures are likely to reinforce market expectations that interest rates will go up before they go down, despite ongoing concerns about a slowdown in growth.

US Dollar (USD)

The dollar rose against the euro for the first time in four days, but lost ground against the sterling after the unexpected surge in UK retail sales led traders to sell the single currency and buy the pound. Elsewhere, a weaker than expected Philly Fed index and a better than expected weekly jobless number more or less cancelled each other out, and failed to inspire trade in the dollar either way. China's announcement that it would be implementing price increases to help out beleaguered refineries helped to drop the price of oil and the dollar was helped out.

Euro (EUR)

With an extremely quiet day in the eurozone, it was no surprise that the single currency was sold off on the back of the stronger than expected UK retail sales number.

Japanese Yen (JPY)

The yen held steady against the US dollar as traders proved reluctant to move back into carry trades ahead of next week's all-important Federal Reserve meeting.