Daily FX wrap – The most notable data of the day in the form of UK retail sales saw GBP reach pre-BoE highs, while aggressive rhetoric from the Ukraine lead to RUB downside.
The European session kicked off today with UK retail sales, whereby the higher-than-expected reading (Ex Auto Fuel M/M 1.50% vs. Exp. 0.40%) saw GBP/USD rise around 80 pips, to move back above towards 1.3150 and to its highest level since the BoE announcement.
Post the retail sales data, GBP/USD continued to hover around this level, with USD shrugging off the key US data of the day, the Philadelphia Fed manufacturing index and weekly jobless claims. As a consequence of the subdued USD trade today, USD/JPY continued to trade around the 100.00 level after the USD softness seen in the aftermath of yesterday’s FOMC minutes release.
One of the more notable moves of the day came in the form of downside in RUB, after Ukraine President Poroshenko stated that the Ukrainian army are ready for escalation and they are not ruling out a full-scale war with Russia.
As well as the downside in RUB, the aggressive rhetoric from the Ukrainian president also exacerbated some of the recent upside in the energy complex, with 16% of natural gas consumed in Europe flowing through Ukraine. This saw strength in commodity linked currencies, with USD/CAD slipping below 1.28 ahead of the London fix.
Tomorrow is set to be a similarly light day in terms of data, with the main highlights coming in the form of UK public borrowing data and Canadian CPI, while participants will also be keeping a close eye on Fed speak with Kaplan scheduled to give a speech overnight.