NEWS / Foreign Exchange

The pound continued to creep higher against the dollar on Thursday

The pound continued to creep higher against the dollar on Thursday as a stronger than expected 1.4% rebound in UK retail sales in February highlighted that upside risks to UK interest rates remained after Wednesday??™s dovish MPC meeting minutes. With the dollar undermined by the Federal Reserve appearing to have dropped its long standing ???bias to tighten???, the pound rose 0.2% on the day to extend its advance on the week to 1.4%.

The signs of resilience in the UK consumer sector also pushed sterling up 0.1% against the euro.

Consequently, the euro continued to edge up against the dollar. Up 0.1% on the day, it has risen 0.5% over the past five sessions.

However, the dollar was stronger against the yen as the ongoing rally in equity markets increased investor appetite for carry trades. Despite rising 0.3% on the day, the dollar closed 2.3% down on its level of a month ago.

Similarly, the yen also continued to give back its recent gains against the euro, closing down 0.4% on the day.

With carry trades back in vogue, the Swiss franc also lost ground against the Western majors, ending the day 0.1% lower against the dollar and 0.2% down against the euro.