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good news for the greenback as the U.S dollar strengthens

A Stronger Dollar, UK Retail Sales Slip & Tesco Shares Drop

Dollar gains on Bullard’s Fed comments

The U.S. Dollar rose to its highest level since early May against the British Pound as James Bullard of the Federal Reserve said he anticipated a 2022 rate hike.

Earlier in the week, the FOMC meeting revealed that 13 of the 18 participants believed that the committee should begin raising rates from their current levels by the end of 2023.

However today, Bullard stated that, “I put us starting in (late) 2022. But you do have to have the idea that these are related to what the forecast is. So, my forecast said 3% inflation in 2021 — core PCE inflation — and 2.5% core PCE inflation in 2022”.

Inflation has been rising at a faster pace than expected, with fuel prices one of the key contributors to the increase.

As a result of today’s comments GBPUSD fell to an intraday low of 1.3795, which is the lowest level since May 3rd.

FTSE 100 falls as UK retail sales slip

Data released from the United Kingdom on Friday showed that retail sales had fallen by more than expected last month.

The figures released by the Office of National Statistics showed that retail sales dropped by 1.4% from April and May, with many expecting a rise of 1.6% for May.

Some believe that the decline in sales comes as a result of the lockdown restrictions in the UK being eased, with many Brits returning to work, and spending more time socializing.

In a statement accompanying the data release, the ONS stated that, “Evidence suggests the easing of hospitality restrictions had an impact on sales as people returned to eating and drinking at locations such as restaurants and bars”.

London’s FTSE 100 dropped by 1.9% on the news.

Tesco Shares drop on weaker sales growth

One of the biggest companies impacted by the fall in retail sales was the UK’s biggest supermarket chain, Tesco.

The company today revealed that in the first quarter of the year sales rose 0.5% which was down from an 8.8% growth recorded in Q4 of 2020.

In response to the slowing of sales growth figures, the company’s CEO Ken Murphy stated that, “We continued to benefit from more people eating at home, although this started to slow down through the quarter as hospitality reopened”.

Despite the positive comments from Murphy, shares in Tesco fell by close to 5% in today’s trading session.

Quote of the day – “Don’t blindly follow someone, follow [the] market and try to hear what it is telling you.”

– Jaymin Shah

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