Sterling
Sterling rose against the dollar on Friday, lifted
by broad weakness in the U.S.
currency and by an opinion poll showing the opposition Conservatives on course
to win a majority in an upcoming general election.
The pound's movements were driven mainly by
the dollar, which fell on reports U.S. President Barack Obama plans to nominate
San Francisco Federal Reserve Bank President Janet Yellen, seen by many as
dovish, as central bank vice chairman.
It also gained support early in the session
by an online opinion poll by Angus Reid Public Opinion showing the
Conservatives well ahead of the ruling Labour Party, contrasting with other
surveys showing the race too close to call.
Euro
Risk
appetite has picked up strongly on Friday's European session despite concerns
about the odds of Chinese government tightening monetary policy to curb
inflation, the Euro and Pound soared against the Dollar, which dropped across
the board.
With
risk appetite returning to the markets, the euro and the pound have both posted
major gains at the expense of the Japanese yen in this week's trading. Both
European currencies have followed almost identical paths, extending three-day
rallies to the tune of more than 300 pips versus the yen.
Euro
recovery from week-lows at 1.3535/45 area on Mar 9 and 10 has broken to levels
above 1.3700 on European session to hit a fresh 3-weeks high at 1.3738 on
improved risk appetite which is weighing the Dollar across the board
Dollar
US retail sales showed a surprise rise in
February as consumers braved extreme bad weather to get to the shops.
The US Commerce Department said retail sales rose 0.3%
last month, whereas forecasts had predicted a fall of 0.2%.
The rise, the biggest since November, fuelled hopes
that economic recovery is gaining momentum and helped to boost shares on Wall
Street.
Parts of America were hit by major snow
storms in February, sparking concerns that consumers would remain at home.
The overall gain in sales was held back by a 2% fall in
car sales, reflecting in part the recall problems at Toyota.
Excluding cars, sales rose 0.8%, far better than the
0.1% rise outside of autos that economists had forecast.
Confidence among U.S. consumers unexpectedly
declined for a second month in March, a sign Americans are discouraged about
the labor market.
Gains in confidence that may encourage
Americans to pick up the pace of spending depend on payroll growth after the
loss of 8.4 million jobs the last two years. Retail sales unexpectedly
increased last month, a separate report from the Commerce Department showed
today.
“Spending will be holding up relatively well
for the remainder of this year but it is not going to come roaring back until
we get the jobs necessary to lower the unemployment rate,” said Ryan Sweet, an
economist at Moody’s Economy.com in West Chester, Pennsylvania.
Stocks fell after the report, with the
Standard & Poor’s 500 Index declining 0.2 percent to 1,148.19 at 10:12 a.m.
in New York.
