Friday in early trading, the British pound extended its recent rally against major rivals following a government report showed that the UK retail sales in January rose much more than analysts had predicted. However, the weak domestic stocks limited the sterling's uptrend against the dollar and yen.
The UK retail sales including automotive fuel grew 1.9% month-on-month in January, the Office for National Statistics said Friday. This follows a 1.4% fall in December. Economists had expected a 0.5% rise. Annually, retail sales volume rose 5.3%, following a 0.7% drop in December. Sales grew more than 4% forecast.
Excluding automotive fuel, sales volume grew 5.3% year-on-year, faster than the 0.3% rise seen in the previous month. On a monthly basis, it rose 1.6%, reversing a 1% fall in December. Economists were expecting a 4.3% rise on a yearly basis and 0.2% growth from December.
The encouraging data provided more optimism in the market as traders expect the Bank of England will hike interest rates in the near-future to curb inflation.
The pound rose to a 2-day high of 0.8367 against the euro around 5.05 am ET. The pound is presently worth 0.8370 per euro, up almost 50 pips from Thursday's close. On the upside, 0.8350 is seen as the next likely target level for the sterling.
German producer price inflation rose to 5.7% annually in January from 5.3% in December, the Federal Statistical Office said today. Economists were expecting the annual rate to ease to 5.1%.
Excluding energy, producer prices rose 4% from January 2010 annually. On a monthly comparison, the producer price index moved up 1.2%, faster than the 0.7% increase seen in December.
Meanwhile, the Conference Board said that its leading index for Germany rose 0.4% to 106.2 in December from the preceding month. The coincident index, a measure of current economic activity, climbed by 0.2% month-on-month to 104.7.
The pound reached as high as 1.5460 against the Swiss franc before leveling off around 5:00 am ET. The pound-franc pair is presently worth 1.5444 with 1.5470 seen as the next likely resistance level in near-term.
The pound also climbed to a 2-day high of 135.47 against the yen around 4:30 am ET, compared to 134.77 hit late New York Thursday. Thereafter, the pair reversed direction slightly and is presently quoted at 135.16. If the pair strengthens further, it may breach the 135.50 resistance and this could set its strongest point in more than six months.
Members of the Japanese central bank's policy board felt more confident of the economic recovery last month amid signs of a rebound in exports, meeting notes of the January policy meeting showed.
Bank of Japan policymakers also felt the negative effects of the removal of government subsidies would wane, lifting the economy to "a moderate recovery path."At the January meeting, the BOJ cut its economic growth forecast for the next financial year to 1.6% from 1.8%.
The pound pared some of its gains after hitting a 15-day high of 1.6233 against the US dollar around 4:30 am ET. The cable is presently worth 1.62 with 1.6150 seen as the next likely support level and 1.63 as a probable resistance.
Finance ministers and central bankers from the G20 group of nations are to meet in a two-day summit in Paris as they renew efforts to address global economic imbalances. The summit will also focus on rising commodity prices, and in particular surging food prices.
With little first-tier economic data to consider today, traders focus on Federal Reserve Chairman Ben Bernanke's speech in Paris later today.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.