The pound and euro held onto most of their gains from the previous day on Wednesday as hopes of an easing of lockdowns in China and rising retail sales in the United States pushed investors into riskier assets and away from the safe-haven US dollar.
Shanghai on Wednesday had a fourth straight day with no new infections outside areas under the strictest lockdowns, with residents awaiting an easing of rules scheduled for June 1.
U.S. retail sales rose sharply in April as consumers bought more motor vehicles amid improved supply and higher restaurant spending.
The pound hit a two-week high of 1.2501 on GBPUSD overnight, after rising 1.4% on Tuesday on data showing Britain's unemployment rate hit an all-time low. The British currency then fell slightly this morning after the publication of an inflation figure at its highest since 1982 but lower than the expectations of operators. Britain's consumer price index came in at 9% year-on-year in April but slightly below expectations of 9.1%. Bank of England Governor Andrew Bailey said on Monday that the current surge in inflation was the central bank's biggest challenge since independence in 1997.
The common European currency touched 1.0564 EURUSD in early Asian trade today, its highest level in a week, after rising 1.1% overnight, its biggest day of percentage gains since March.
French President Emmanuel Macron appointed a new prime minister, Elisabeth Borne, on Friday as his 2nd term starts this week. Ms Borne served previously as Minister of Labour and as Minister of Ecology during Macron’s first term. Her nomination comes as France faces a big social debate over unemployment and retirement age as the country is split between reducing the retirement age or increasing it, in a country where unemployment rate has never been below 7.2% since 2003 and currently sits at around 7.4% but remains around 20% for people under 30.
Cable saw big gains yesterday as GBPUSD opened at 1.2486 and closed at 1.2485.
GBPEUR followed a similar trend yesterday with the pair opening at 1.1790 and reaching a high of 1.1902.
