Date: Friday 23 Jul 2010
Strong economic data out of the eurozone and the UK put pressure on the dollar Thursday.
An index based on the eurozone’s manufacturing and services industries (PMI) rose unexpectedly this month, up to 56.7 from 56 in June. Economists had predicted a fall to 55.2.
That increased the euro’s popularity, which was further enhanced by growing confidence that results from the European bank stress tests, due today, will throw up no surprises.
US data didn’t help the greenback’s cause. Purchases of existing houses dropped 5.1% to an annualised rate of 5.37m, according to the National Association of Realtors, while the index of leading indicators fell 0.2% in June.
A report showing initial jobless claims surged more than 8% to a seasonally adjusted 464,000 in the week ended 17 July did little to the dollar. Analysts were looking for 445,000 initial claims.
The pound did well against the US currency after a decent set of retail sales figures.
Britons building up supplies for last month’s World Cup, the good weather and further discounting had sales up smartly in June.
Volumes rose a bigger than expected 0.7% between May and June, according to the Office for National Statistics (ONS), while May's gain was revised up to 0.8% from 0.6%.
Sterling fell versus the euro though as the data was no match for the eurozone PMI.
Analysts think consumer spending should make a decent contribution to second quarter GDP, but will be limited over the second half of 2010 and beyond.
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