By Kenny Fisher
The British pound continues to move higher against the US dollar, as it has throughout the week. GBP/USD is trading above the 1.66 line in the North American session. On the release front, British Retail Sales bounced back in February with a strong gain. In the US, Unemployment Claims continue to drop, but Pending Home Sales disappointed with its second decline in three readings.
US Unemployment Claims continues to impress. The key indicator dropped to 311 thousand, its lowest level in over three months. The estimate was 326 thousand, marking the fourth straight week that the reading has come in below the forecast. The news was not as good from Pending Home Sales, with a reading of -0.8%. This disappointed the markets, which had expected a small gain of 0.1%. Earlier in the week, New Home Sales also lost ground in February, and concern is bound to increase about the health of the US housing industry.
In the UK, Retail Sales posted a solid gain of 1.7%, bouncing back after a decline of 1.5% in January. The reading easily beat the estimate of 0.5%. This key indicator is the primary gauge of consumer spending, which is a key component of economic growth. The pound responded to the release with more gains, and the currency has gained about 150 points in the past week against the dollar.
Ukraine's economy is in shambles as a result of the four-month political crisis. Prime Minister Arseniy Yatsenyuk acknowledged that the country is on the edge of bankruptcy, and GDP could drop by 3% this year. However, help is on the way. The IMF is set to sign a two-year loan of up to $18 billion, and the EU has offered a package of EUR 11 billion. Ukraine has already received two bailouts from the IMF since 2008, and will have to implement budget cuts and other measures in order to receive the new package from the IMF.