The dollar advanced to a one-month high versus the euro and the yen as U.S. consumer confidence
increased and crude oil prices dropped, reducing concern the economy may fall
into a recession. The New York-based Conference Board's U.S. consumer confidence index rose
this month to 51.9, higher than forecast, from a revised 51 in June, the lowest since
February 1992.
The pound dropped sharply in value
against other currencies after a survey by the Confederation of British
Industry showed UK
high street sales are falling off the charts.In its distributive
trades survey, the CBI said the balance of retail sales came of -36% (the
lowest reading since the survey began in July 1983) versus June's -9%. Analysts
had expected a more modest fall to -15%.
"The
survey... significantly bolsters the case for the Bank of England to hold off
from raising interest rates despite current elevated inflation levels and
risks," said Howard Archer at Global Insight. "Indeed, it very much
boosts the case for the next move in interest rates to be down," he added.
The yen declined earlier against the dollar after government reports showed Japan's
unemployment rate rose in June to 4.1 percent, the highest level in almost two
years, and household spending fell, adding to signs the economy's longest
postwar expansion may be ending.
EUR/USD consolidated
within the $1.5740/55 range overnight before sliding to $1.5725. Later euro recovered
to session high, but strong data from US spurred the sell-off down to $1.5550.
GBP/USD rose
to $1.9968, but offers ahead of $1.9980 capped the rise and rate retreated to $1.9931.
Later weak CBI retail sales report dragged the pound down to $1.9760.
USD/JPY held
within the Y107.30/45 before rising to Y108.30 and set stable around Y108.10/30.
EU data
starts with inflation numbers from Italia. But more important EU economic and
consumer indexes will be.
At 12:15 GMT
focus will be on private ADP report on employment in US. The report is very important
as it comes ahead of Friday’s Non-farm payrolls report.
At 12:30 GMT
Canada
is due to release its PPI report.