WSJ:Weak Retail Data Knock Sterling; Euro, Stocks Tread Water
By Nina Bains
Sterling fell sharply against the dollar Friday after U.K. retail sales disappointed, while European stocks were mixed and the euro oscillated as investors eyed the Group of 20 talks in Moscow.
Sterling briefly plunged to a six-month low of $1.5476 while gilts rallied on data showing a surprise drop in retail sales in January, blunting hopes the U.K. economy will return to growth this quarter.
The euro oscillated against the dollar as investors digested comments from euro zone officials.
The single currency got a brief boost after European Central Bank council member Jens Weidmann told Bloomberg the euro isn't seriously overvalued and said ECB won't tamper with the exchange rate.
Soon after, the single currency dipped to a fresh three-week low, trading below $1.3315, signalling investors' nervousness.
European Central Bank President Mario Draghi later lashed out at the growing talk of currency wars as inappropriate and self-defeating, reiterating his view that effective exchange rates are in line with their long-term average.
"It looks like Draghi is willing to send reassuring signs," said Annalisa Piazza, strategist at Newedge.
"Given the risks associated to a stronger euro, the ECB cannot afford to sound hawkish as the ongoing normalization process would be heavily undermined."
European stocks treaded water as investors digested the comments and assessed mixed corporate news.
Shares in Germany's second largest bank, Commerzbank pared loses to trade higher. The company said net profit fell to 6 million euros ($8 million) from EUR638 million a year earlier, but added that management would take cuts in the variable remuneration for 2012.
Aker Solutions shares slumped after the Norwegian oil services company posted a lower-than-expected fourth-quarter net profit.
Shares in ENI fared better. The Italian oil and gas company said it plans to increase its 2012 dividend by almost 4% while also reporting fourth-quarter net profit broadly in line with views.
Dutch life insurance Aegon shares rallied after the Dutch insurer reported a sharp rise in fourth-quarter net profit thanks to higher sales, and lower restructuring charges.
Anglo American shares gained after the miner raised its full year dividend 15% and reassured investors it expects a better year following a challenging 2012.
U.S. stock futures were slightly weaker with investors also likely to focus on the gathering of G20 finance ministers for comments on monetary policy and currency devaluations.
Latest Price Change From Previous Close
Stoxx Europe 600 287.72 0.0%
FTSE 100 6322.60 -0.1%
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DAX 7615.88 -0.2%
Nikkei 225 11173.80 -1.2%
Hang Seng 23444.50 +0.1%
Shanghai Composite 2432.40
Dow Jones Industrials 13973.30
S&P 500 1521.38
Mar. DJIA Future 13936.00 -0.1%
Mar. S&P 500 Future 1516.30 -0.1%
Level In Late New York Trading
(Previous Session)
EUR/USD 1.3337 1.3363
USD/JPY 92.56 92.88
GBP/USD 1.5502 1.5491
Change From Previous Close
Mar. German Bund Future 142.80 +0.21
Mar. U.K. Gilt Future 115.52 +0.29
Mar. Nymex Crude Oil 96.84 -0.47
Apr. Brent Crude Oil 117.77 -0.23
Gold 1627.90 -8.00
