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LONDON, Aug 22: Sterling tracked the euro down against the dollar on Thursday after lacklustre retail sales data suggested Britain’s consumer boom may be losing momentum.
Retail sales volumes in Britain grew just 0.3 per cent in July after declining for two consecutive months. This took year-on-year growth to 4.5 per cent, the lowest annual rate for 18 months.
Sterling was down more than a third of a per cent at $1.5262 but little changed against the euro at 63.94 pence.
There was a bit of disappointment over the retail sales numbers this morning, but not enough to push sterling out of its recent ranges, said Lee Ferridge, head of global currency strategy at Rabobank.
For the moment, sterling is really just taking its cues from euro/dollar moves.
The retail sales report was followed by a survey of activity in Britain’s manufacturing sector which showed order books remained weak but optimism had improved.
Releasing its monthly report, the Confederation of British Industry also said it had revised down its economic growth forecast for 2003 to 1.5 per cent, from a previous estimate of 1.7 per cent.
British gross domestic product data for the second quarter is due on Friday and is expected to be revised down from the initial estimate of 0.9 per cent.
When the government statistics office released the preliminary GDP data a month ago, it only had manufacturing output data for April and May. Since then June data showed a 5.3 per cent tumble on the month, the worst performance in 23 years.
The GDP numbers could upset sterling tomorrow, but the market is already positioned for a downward revision, said Ferridge.
TOKYO: The dollar rose against major currencies on Thursday buoyed by gains on Wall Street and a rush of speculative trades, dealers said.
The greenback traded at 118.99-119.02 yen up from 118.53-58 yen in New York and 118.02-05 yen in Tokyo late Wednesday.
The euro bought 0.9765-68 dollars, compared with 0.9798-0.9801 dollars in New York and 0.9812-15 dollars in Tokyo late Wednesday.
It’s just speculators. The 119 yen should be a key point from an option standpoint and it’s already triggered, said Hidehiko Inamura, foreign-exchange vice president at Citibank after the dollar hit a morning high of 119.15 yen.
Meanwhile, repatriation flows from Japanese investors ahead of the fiscal half-year ending in September may be limited, though exporters will continue to sell into the dollar’s rally.
The real force driving the yen will be exporters. They still have a lot of US dollars to sell, he said.
Singapore dealers said the comments by Fed officials indicating further rate cuts and a stabilising of the US economy were boosting the dollar against the euro.
This will support the US stock market and the US dollar, said a BNP Paribas dealer.
Against the yen, the euro traded at 116.21 around 5:00 pm, compared with 116.15 in New York and 115.75 in Tokyo Wednesday afternoon.
In late Singapore trade, the dollar was up at 42.115 Thai baht from 42.055 on Wednesday, 34.0359 Taiwan dollars from 33.987, 52.13 Philippine pesos from 52.00, 1,193.75 South Korean won from 1,192, 1.7520 Singapore dollars from 1.7476 and 8,847.50 Indonesian rupiah from 8,840.—Reuters/AFP
