By TraderVox.com
Tradervox (Dublin) – The sterling pound overturned its five-day decline against the yen and advanced the most against the dollar after a report released yesterday showed that the UK retail sales increased in March. The sales report showed that the sales increased by 1.3 percent from the figure registered a year before. This came after another report released in March showed that the UK sales had decreased by 0.3 during the month of February. The positive report boosted demand for UK assets hence boosting demand for the sterling pound.
After the report was released, Neil Jones, the Head of European Hedge-Fund Sales at Mizuho Corporate Bank Ltd, said that the sterling pound will offer a safe haven when the global markets regains confidence adding that the UK economy has shown some recovery signs despite the warning by Fitch and Moody’s. The report by the British Retail Consortium boosted the pound against major currencies. The pound strengthened 0.7 in the first quarter of the year.
The pound strengthened 0.3 percent against the dollar to trade at $1.5909 during the London session; it had earlier climbed to as high as 0.5 percent, which is the most it has been since March 30. The sterling also gained against the yen by 0.6 percent to 128.72 yen while it remained unchanged against the euro trading at 82.86 pence per euro.
However, currency strategists are claiming that it will be difficult for the pound to extend gains beyond $1.59. Therefore, a cap of $1.60 would be good but extending beyond this would require something positively dramatic to happen in the UK economy. Data from the US and speculation of third round of quantitative easing in US will play a big role in balancing the GBP/USD pair at lower $1.59.
Investors will be keeping a keen eye on the developments in the UK economy as they search for signs of recovery. The efforts done by the Bank of England will also be put to test as traders wait for results. Investors will also be looking at the Producer price index set to be released this week.
Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management.
Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox
