Pound Sterling - UK Markets

The pound is relatively unchanged this morning in terms of currency transfer rates, trading at 1.63 against the US dollar and 1.17 against the euro. The pound has gained on its major currency partners with the exception of the Australian, New Zealand dollar and South African rand.

Currency transfer rates for the pound hit a one-week low against the euro yesterday, after UK retail sales declined in May. Retail sales fell 1.6% from this time last year. News that public sector borrowing rose to GBP20 billion also rattled investors and led to declines in sterling exchange rates. There is no data out in the UK today with the Rightmove house pricing index released on Monday.

US Dollar - US Markets

The greenback spiked yesterday following a return to risk aversion after jobless claims rose by 608,000 in May. This morning the dollar has trimmed gains and is currently trading at 0.71 against the euro and 0.61 against the pound. 

The Philadelphia Fed survey, a snapshot of manufacturing conditions in the US, came in at better than expected levels yesterday, renewing speculation that the US may be on the verge of economic recovery. This drove demand for higher yielding currencies at the expense of the safe haven, although this trend was reversed with the release of unemployment data showing jobless claims at 608,000 in May. There are no major announcements in the US today.

Euro - European Markets

Euro rates for currency transfer remain within recent ranges against the pound and US dollar as investors are uncertain over global recovery prospects. The euro has strengthened against a basket of international currencies, although declined against the pound, rand and Australian dollar.

EU leaders have claimed additional stimulus is unnecessary for the eurozone, with an "exit strategy" more preferable as the end of the recession is in sight. This sense of optimism from officials has boosted currency transfer rates for the euro with the euro climbing the most in two weeks against the yen. The German producer price index is unchanged for May, running at 0.0% on the month with an annual decline of -3.6%. There is no data out in the eurozone today.

Other Currencies - Highlights

Minutes from the Bank of Japan meeting have shown senior members believe that extending liquidity schemes depends on the rate of recovery in the financial sector. The bank also noted that Japan's worst post-war recession is easing following fiscal stimulus measures and increased production globally. Currency transfer rates for the yen strengthened marginally following the announcement.

Canadian CPI yesterday showed an unexpected rise in inflation, from 1.8% to 2%, in contrast to the market expectation of a decline to 1.6%. Canadian retail sales figures are due today in an otherwise light day for market data.