North American FX Open - Upbeat UK data lifts Cable to three week high

The DOLLAR has handed back a decent sized proportion of yesterday's data inspired gains and looks set to end the week having lost ground over the last five days, despite the improved market mood derived from yesterday's encouraging retail sales numbers and the fall in jobless claims.

A degree of profit-taking has gone through in Usd/Jpy, with the pair retreating to 148.33 in recent trade, after rising to a two week high up at 149.35 overnight.

Nomura International reported that the popular YEN-centered carry trade that blew up spectacularly two weeks ago appears to be creeping back. The Japanese firm have seen a variety of investors start borrowing the YEN once again to invest the proceeds elsewhere in higher-yielding assets.

RBA Governor Bullock spoke overnight and remained her hawkish self, stressing that the central bank remains some way off easing monetary policy, while noting that inflation is proving persistent and will only return back to their target range late next year. Aud/Usd is really struggling to wade its way through the considerable offers reported layered into 0.6650.

UK retail sales matched expectations in July, bouncing back from the weakness seen in July, The ex auto fuel figure rose by 0.7% in July, helped by spending related to the Euros and encouraged by larger discounting.

The data has seen Gbp/Usd rise back above the 1.2900 level for the first time in three weeks and sent the Pound to the top of the G10 currency performance table for this week.

US data today includes housing starts/permits and then the UMich sentiment report, while the Fed's Goolsbee looks like he is doing a media round today.

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