Strong figures from the US
Further improvements in the US jobs market and lower borrowing costs helped retail sales rise more than expected in May. The rise was the largest increase in three months with cheap finance helping to bolster car sales while higher stock prices and rising property values are boosting consumer confidence.
A further report shows the resilience in the US jobs market as initial claims for state unemployment declined by 12,000 to a seasonally adjusted 334,000. This is the lowest number of first time applications since early May as fewer companies lay off staff.
The Pound remains steady as employment reached a record high of 29.8 million. Claimant count unemployment also declined by a further 8,600 in May. This positive tone was tempered as average earnings growth increased slightly to 0.9% but still behind the CPI inflation figure of 2.4%, suggesting real pay continues to fall for most UK households.
GBP/USD gained momentum and pushed back above the $1.57 level for the first time in four months to a high of $1.5734 while GBP/EUR just failed to break the 1.18 level. Meanwhile, EUR/USD softened below the $1.33 level falling to a low of $1.3277 but comments suggesting the Fed may delay any QE saw the euro back above $1.33.