The Dollar rose versus the Euro on Thursday, helped by a sharp drop in crude Oil prices to 131.93 and a surge in British retail sales that caused traders to offload the European single currency to buy Sterling.
May's surprise jump in retail sales raised expectations the Bank of England will raise interest rates, helping to drive the pound to its highest level in over a week against the Dollar and spark a rally versus the Euro. While the Federal Reserve had turned hawkish due to rising price pressures ignited by record oil prices, analysts believe it is unlikely to raise U.S. interest rates before year-end as the economy remains sickly.
Swiss National Bank left interest rates unchanged at 2.75% despite inflation at multiyear highs had some psychological effect on the market, but analysts cautioned against reading too much into the move. There had been suggestions that the Swiss bank's decision could mean the European Central Bank would not tighten policy further after an anticipated rate increase in July.
Yesterday, EurGbp was down 0.96% to 0.7859. EurUsd was down 0.3% at 1.5499. GbpUsd rallied to an intraday peak of 1.9746. It was last up 0.67% at 1.9726. UsdJpy went up 0.18% at 108.01 while UsdChf rose 0.85% to 1.0443. EurChf rose 0.53% to 1.6184.