GBP - British Pound
There was more positive news for the UK economy on Friday morning, as retail sales for April came in at 9.2%, nearly double the March figure of 5.1%. The figure was over double the expected 4.5%, suggesting areas of the economy are recovering far quicker than predicted.
Sterling has been trading sideways for a large part of the week, however saw a slight lift on the back of the data. GBPUSD broke the 1.42 handle before retracing back towards the mid 1.41 range. The pound may see further support from the Flash Manufacturing and Services PMIs later on Friday, as we find out whether the whole economy is experiencing the enhanced recovery.
Federal Reserve member Kaplan has suggested that slow and steady is still the best way to manage the US economy recovery, and that tapering is still not necessary. There seemed to be a bit of a roadblock in US data on Thursday as the Philly manufacturing index came in at 31.5, down from 50.1 in April. The US dollar felt a knock on the news as it slightly weakened against the majority of major currencies. The reading suggests a monthly contraction in the US economy, which in turn reduces the global risk appetite.
The Eurozone is scheduled to print Services and Manufacturing PMI's on Friday, as well as another speech from ECB president Lagarde. The euro could feel a boost from positive PMI data, however the majority of euro volatility could stem from traders trying to read between the lines whilst Lagarde is speaking.