Canadian Inflation Soars, U.K. Retail Sales Surprise

Fundamental Headlines

•    USDCAD  –  Canadian inflation jumped 1.0% in May, the most since January 1991, bringing the annualized rate to 2.2%. It was the first time that consumer prices have been above 2% in four months, as gasoline prices soared 15% from a year ago. The rising energy costs accounted for the majority of the gain as the core reading remained unchanged at 1.5%. The results which exceeded economist expectations of 1.9% reinforced the BoC’s decision to leave their benchmark interest rates unchanged at their June 10 policy meeting. Discuss the topic and your trade ideas in the USD/CAD Forum.
•    USDCHF  –  The Swiss National Bank left their benchmark interest rate unchanged at 2.75% as expected. The central bank increased their inflation expectations for the year from 2.0% to 2.7% as rising energy and food costs continue to filter throughout the economy, but would suggest that inflation was transitory and that it would ease to 1.7% in 2009 and 1.3% in 2010. For  more news and resources, visit our Swiss Franc Currency Room.
•    GBPUSD  –  U.K.  May retail sales significantly surprised to the upside printing a 3.5% jump against expectations of a 0.1% decline, which was the biggest increase since records began in 1986. The warmest May ever saw shoppers load up on seasonal foods and clothing lifting annualized sales 8.1% from 3.8% the month prior. The news will allow the BoE to keep interest rates on hold as they continue to monitor the upside risks of inflation, which rose above the 3% threshold at 3.3%. Discuss the topic and your trade ideas in the GBP/USD Forum.

•    Regional Shares Snap Winning Run On Credit Concerns and Oil’s Rise (link) – Wall Street Journal
•    Paulson Pushes Oversight Changes (link) – Wall Street Journal
•    Pound Surges After Sales Shock (link) – Financial Times
•    Hedge Funds Hire From Wall Street as Jobs Disappear, Pay Falls (link) – Bloomberg
•    Wealthy Investors Shift Funds from Global Banks to Reduce Risks (link) – Bloomberg