Currency Update

Currency Update

Well not unlike the Holland v Italy match last night, there was a small surprise to the UK markets from the BRC May Retail Sales Monitor with retail sales growing at their fastest pace for 4 months, stating warm weather for encouraging consumers to load up on summer essentials. This data however was met with a degree of caution as the underlying trading is still hard going, as customers continue to be hit in the pocket by the increasing daily essentials. The same caution is extended to the better than expected RICS House Price Balance data, when we consider that other date points towards an increase in those home owners now in negative equity & surveyors experiencing a reduction in transactions.

The Fed's Bernanke made a speech overnight stressing that they Fed are committed to controlling the upside risks of inflation, stating that a global tighter monetary policy may be required.

It was a different case with the ECB's Trichet yesterday who was at strains to playdown his comments in regards to the possibility of a rate increase in the near future. Consequently is was the Dollar that main gains off the back of the same.

This morning Manufacturing production figures registered better that expected with a 0.1% growth as opposed to a flat figure, however it still does little to change the outlook on the UK economy.

Tomorrow's data is concentrated on UK employment, given the recent Service Sector figures it will be interesting to see how these read.

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