Yen, sterling weaker as US dollar strengthens

In global currencies markets on Wednesday, sterling weakened on new figures showing that growth in earnings in the UK is lagging behind fairly high inflation levels there. The pound lost 0.1 percent against both the greenback and the euro, to $1.9730 and £0.6740 respectively. However, sterling did manage an 0.5 percent advance against the yen, to ¥241.32 as investors continued to sell the yen to finance carry trades.

New retail sales data showed that sales were up 1.4 percent in May in the United States, twice the gain that had been anticipated, sending the dollar higher. The gain raised expectations that US interest rates will go up either later this year or early in 2008. After a slight decline during afternoon trade, the greenback was still 0.1 percent higher in relation to the euro to $1.3290, while it added 0.2 percent to SFr1.2445 versus the Swiss franc and gained 0.6 percent to ¥122.48 against the yen.

In addition to declines versus sterling, the yen also weakened 0.5 percent against the euro to ¥162.66, while it fell 0.6 percent to ¥102.77 in relation to the Australian dollar. It was 0.8 percent lower to ¥91.75 versus the New Zealand dollar.

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