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Pound/Dollar Up After Support from Crosses

The dollar index on Friday is in a sideways at 99.23. The USD is strengthening against the EUR and JPY, but weakening against commodity currencies (AUD, NZD and CAD). The euro/dollar is trading at 1.0817, with the pound dollar at 1.4318.

The GBP is up after yesterday’s ECB comments and after ignoring the disappointing UK retail sales data.

The UK retail sales index for December was down 0.1% MoM and up 2.6% YoY (forecasted: -0.3% MoM, 4.3% YoY, previous: reassessed from 1.7% MoM, 5.0% YoY to 1.3% MoM and 4.5% YoY).

Extra support for the pound came from a growth in the stock indices. By the end of Friday, the Shanghai Composite was up by 1.25% to 2,916.56. The Nikkei index was up 225 points (almost 5.88%). The French CAC40 is down by 3.28% and currently stands at 9,776.50 points. The UK FTSE 100 is down by 2.41% to 5,914.00 and Brent is up by 5.31% to $31.15.

Since the euro/dollar and pound/dollar are up and down, tonight the situation could change and the pound/dollar could correct to 1.4250, with the euro/dollar back to 1.0850.

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