US retail sales rise
Figures just released show retail spending in the US rose 2.7% in the month to August and gained 1.1% on the year. The producer price index also rose 1.7% on the month and climbed 0.2% ex food and energy prices. Perhaps most significant is the figure showing new motor vehicle sales rising to 5.3% on the month, after recording -0.6% in July.
The Fed's "cash for clunkers" initiative has helped fuel retail sales in the US, also boosting manufacturing and production levels. The underlying retail trend has been more positive recently and this suggests that despite rising unemployment, the US economy is approaching a return to productivity. The figures may trigger a boost in risk aversion in the market, sending foreign exchange rates higher for the higher yielding currencies.
Foreign exchange rates for the US dollar are currently at GBP0.6073 and EUR0.6844.
The rates quoted above are interbank rates. Client rates may vary according to the volume and timing of the trade.