With a slight gain made against the dollar yesterday, but losses seen against the euro, GBP had something of a mixed day. The one very positive thing seen yesterday, however, was data released showing that the UK’s unemployment rate is now sitting at its lowest level since 2008 having fallen by 154K – this now means that there are a mere 1.97 million people out of work in the United Kingdom. On average, weekly earnings are also on the up – having come in at 0.9% as opposed to the predicted 0.8%. Whilst this is great for the UK’s labour market, what the UK really needs to see is improvement across other sectors too to be able to gain some much needed currency traction.
The euro saw gains against the dollar yesterday but this was more due to the fact that US retail sales came in disappointingly. We only saw German CPI numbers out yesterday which came in at the predicted 0.8%, aiding EUR somewhat. Germany did, however, cut its 2014 growth forecast which may very well have a negative impact on the single currency in the near future.
Retail sales were of main concern for the States yesterday as they missed the forecast (-0.1%) to come in at -0.3% - the knock-on effect then being a drop in value for USD. The Fed’s Beige Book report added to the concern by indicating that the US is only seeing ‘modest to moderate’ growth. On the whole, though, the US economy isn’t looking too bad and if further positivity is seen it could mean that they will be the first major economy to raise interest rates.
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