LONDON, May 22 (Reuters) - The Icelandic crown fell versus the euro and the dollar at local market open on Thursday after the island's central bank left rates on hold at 15.5 percent, disappointing expectations for a hike.
"With inflation way above target, the market will sell crowns. They really did need to push rates higher," said Chris Furness, head of currency strategy at 4CAST.
By 0916 GMT, the euro was up half a percent at 115.41 crowns <EURISK=>, while the dollar rose 0.8 percent to 73.23 crowns <ISK=>.
(Reporting by Veronica Brown and Toni Vorobyova)
((antonina.vorobyova@reuters.com; Tel: +44207 542 7958, Reuters Messaging: antonina.vorobyova.reuters.com@reuters.net))
Keywords: MARKETS FOREX/ICELAND
LONDON, May 22 (Reuters) - Sterling hit a session high against the dollar on Thursday and UK rate futures and gilts fell after a UK retail sales figures, while weak, were more resiliant than market participants had been expecting.
Figures showed that British sales fell 0.2 percent in April from the previous month, clocking a slide for the second straight month but coming in slightly stronger than forecasts for a 0.5 percent fall.
The data added to expectations that the Bank of England may not cut interest rates in the coming months as the economy may not be as grim as some had been expecting, while inflation risks remain high.
Sterling climbed shortly after the announcement, hitting a session high of $1.9767 <GBP=>, up 0.2 percent on the day. The euro slipped to a session low of 79.69 pence <EURGBP=>, pulling away from a one-month high hit on Wednesday.
"People had been looking for quite a sharp fall based on the numbers we've seen for consumer confidence and other indicators. It (the fall) was a lot less than expected...this show that there is really no need for them to cut interest rates," said Jeavon Lolay, economist at Lloyds TSB Financial Markets.
"Inflation is a bigger concern and I think these data confirm that."
UK interest rate and gilt futures fell after the data, pushing implied rates and government bond yields higher.
Two-year gilt yields rose two basis points to 4.88 percent <GB2YT=RR> and 10-year yields also rose two basis points to 4.90 percent <GB10YT=RR>.
The June gilt future fell around 15 ticks to 106.80 <FLGc1> and short sterling contracts wiped out modest gains to trade down as much as 5 ticks at the back end of the 2008 strip <0#FSS:>.
(Reporting by London Markets Team)
((naomi.tajitsu@reuters.com; Tel: +44207 542 5830, Reuters Messaging: naomi.tajitsu.reuters.com@reuters.net))
Keywords: MARKETS STERLING/DATA
(corrects low in paragraph 3)
LONDON, May 21 (Reuters) - The Canadian dollar jumped to a fresh two-month high versus the U.S. currency on Wednesday, boosted by stronger than expected Canada inflation data.
Consumer prices rise 0.8 percent in April against a forecast of 0.5 percent, while core prices also beat expectations with a 0.3 percent increase.
The U.S. dollar fell as low as C$0.9828 <CAD=> after the data, from around C$0.9860 previously.
(Reporting by Toni Vorobyova)
((antonina.vorobyova@reuters.com; Tel: +44207 542 7958, Reuters Messaging: antonina.vorobyova.reuters.com@reuters.net))
Keywords: MARKETS FOREX/CANADA
LONDON, May 21 (Reuters) - The Canadian dollar jumped to a fresh two-month high versus the U.S. currency on Wednesday, boosted by stronger than expected Canada inflation data.
Consumer prices rise 0.8 percent in April against a forecast of 0.5 percent, while core prices also beat expectations with a 0.3 percent increase.
The U.S. dollar fell as low as C$0.9558 <CAD=> after the data, from around C$0.9860 previously.
(Reporting by Toni Vorobyova)
((antonina.vorobyova@reuters.com; Tel: +44207 542 7958, Reuters Messaging: antonina.vorobyova.reuters.com@reuters.net))
Keywords: MARKETS FOREX/CANADA
LONDON, May 21 (Reuters) - The euro's broad rise picked up pace on Wednesday, taking it to one month highs versus the dollar and sterling in follow-through buying after a surprisingly strong reading of German business sentiment.
By 1040 GMT, the single currency had hit a one-month high versus the dollar at $1.5767 <EUR=>, while the euro also hit a four week high of 80.17 pence, shaping up for its biggest one-day gain in a month <EURGBP=>.
"The dollar is seriously under pressure and the euro is benefiting from thoughts of higher interest rates and clearly inflation is the reason," said a trader in London.
(Reporting by Toni Vorobyova and Veronica Brown)
((RM:veronica.brown.reuters.com@reuters.net; Tel: +44 207 542 6745))
Keywords: MARKETS FOREX/EURO
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