Euro Flat as Oil Rally Pauses, Sterling Edges Higher on Robust Retail Sales
The euro struggled to find direction against the US dollar in London trading on Thursday, hovering near flat levels as conflicting signals from commodity markets and economic data kept traders on the sidelines.
A pause in the sharp rally in crude oil futures eased buying pressure on the world's reserve currency, but concerns over persistently elevated oil prices continued to weigh on the euro's upside potential.
The flash estimate for the Eurozone Composite Purchasing Managers' Index (PMI) for July came in at 51.9, an improvement from June, yet deeply entrenched uncertainty over the trajectory of oil prices and Eurozone inflation meant the improved business sentiment failed to translate into aggressive euro buying.
The British pound, however, edged higher against the dollar, supported by a batch of encouraging economic data released Thursday morning, including UK retail sales for June rising 1.0% month-on-month and the Bank of England's Decision Maker Panel (DMP) survey showing moderated corporate expectations for price increases.