Pound rides high as data hits hopes of U.S. rate rise

Pound rides high as data hits hopes of U.S. rate rise

At the time of the report, the Euro was up 0.13% at $1.14125 ahead of today's stats, with monetary policy divergence remaining in favour of the Euro ahead of next week's European Central Bank interest rate decision and press conference, when the markets will certainly be demanding timelines on when a tapering to the asset purchasing program will begin.

"Caution on the part of consumers comes despite a solid job market and booming equity markets and is feeding into core inflation through price wars on cell phone service, airfares, cars, clothing", she told Business Insider. Excluding food and energy, prices rose 0.1%.

Excluding auto sales, retail sales still dipped by 0.2% in June following the 0.3 decline seen in May.

Regarding the reaction in the forex markets, the dollar index, which gauges the dollar's strength against major rival currencies, fell sharply by 0.50%, reaching a new nine-month low of 95.30.

UK's benchmark FTSE 100 closed down by 0.7 percent, the pan-European FTSEurofirst 300 ended the day down by 0.01 percent, Germany's Dax ended down by 0.2 percent, France's CAC finished the day down by 0.1 percent.

Against the Japanese yen, the greenback was down 0.62 percent to 112.57 yen, after hitting a near two-week low of 112.28 yen.

She said it was premature to reach the judgment that the USA is not on track to reach its target of 2 per cent inflation over the next few years.

Adding to the downward pressure on yields Friday was a report from the Commerce Department that retail sales fell 0.2% in June from the prior month.

Other currencies including the Australian dollar gained 0.3 percent to 0.7759 extending weekly gain to 1.9 percent, its biggest since period ended March 17.

In early trading, USA 10-year yield fell to 2.308 percent, from 2.331 percent before the data.

Other US data releases today pertained to June retail sales, a measure acting as a proxy for consumer spending.

USA interest rates futures rose as traders pared their viewthe Fed would increase rates again in 2017.

Gold prices jumped 1.4 percent to the highest level in almost two weeks on Friday after data pointed to weak US inflation, reaffirming doubts that the USA central bank would again hike interest rates this year.

USA two-year yields slid as well, down to 1.339 percent, from Thursday's 1.367 percent, after sliding to a three-week trough of 1.323 percent.

The Dow Jones Industrial Average .DJI rose 84.65 points, or 0.39 percent, to 21,637.74.

USA 10-year yield fell to 2.303 percent, from 2.348 percent late on Thursday.

Gas prices fell 2.8 percent in June, after a 6.4 percent fall in May.

Before this week, investors had been selling bonds, driven largely by anxiety that an improving global economy may allow major central banks outside of the scale back on stimulus efforts that have helped lift asset prices since the financial crisis.

The greenback reversed from an early more than a 2-week high of 0.9701 against the Swiss franc, edging down to 0.9635.