FX round-up: Retail sales boost pound again

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Date: Monday 25 Feb 2008

LONDON (ShareCast) - Sterling gained versus a generally weaker dollar Friday as traders continued to mull the previous session’s stronger than expected UK retail sales data.

Numbers released Thursday revealed retail sales jumped 0.8% in January, reversing the previous month’s 0.4% decline and trumping expectations for a 0.3% recovery.

Experts reckon the data means the Bank of England may not be as aggressive with its rate cutting programme as previously hoped, although another reduction is expected in the spring.

But the greenback recovered some ground late on as talk that a rescue package for troubled bond insurer Ambac is imminent sent Wall Street soaring towards the close.

The US currency clawed back some of its deficit versus the yen, which had gained earlier on despite disappointing predictions for the economy from Japan's Cabinet Office.

There were gains for the euro, although these were pared on news that euro zone industrial orders fell 3.6% in December from the previous month and rose 2.1% year-on-year.

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