Daily currency report
Overview
Sterling fell to one-week lows against the dollar and euro while the US dollar also struggled as it fell against the euro and higher-yielding currencies. The euro was particularly active; with the single European currency jumping against the Swiss franc amid speculation the Bank for International Settlements was buying euro on behalf of the Swiss National Bank to defend key levels.
Sterling
Sterling tumbled against a basket of currencies as UK retail sales caught the markets off guard with a fall of 0.6 per cent in May, wrong-footing expectations of a 0.4 per cent rise. The year-on-year rate of sales growth is now down and some analyst suspect that it has further to fall given that rising unemployment and falling wage growth are hurting spending power.
US Dollar
The US dollar extended gains against the yen after data showed a decline in US continuing jobless claims in the latest week. The number of workers filing new claims for jobless benefits rose last week but the number of peoples staying on the benefit rolls after collecting an initial week of aid fell for the first time since January, a government report showed.
Euro
The euro gained against the greenback. It was as one of the beneficiaries of dollar selling as further signs of "green shoots" appeared in the US economy with upbeat data releases. However, the euro rally struggled which suggest the markets remains unsure about the signs of possible recovery.
Japanese Yen
The low-yielding yen was the main victim of the rise in risk appetite after the string of positive data releases from the US.