An employee counts £20 banknotes inside a Travelex store in London. The British pound hit two-month highs against the euro on upbeat retail sales data yesterday.


AFP/London


European stocks rose slightly higher at the close yesterday as Wall Street also edged up, while dealers speculated over the exact timing of a hike in US interest rates.
On the currency market, the British pound hit two-month highs against the euro on upbeat retail sales data.
London’s benchmark FTSE 100 index ended the day up 0.09% at 7,013.47 points.
In the euro area, Frankfurt’s DAX 30 climbed 0.14% to 11,864.59 points while the CAC 40 in Paris gained 0.26% to 5,146.70 points compared with Wednesday’s close.
David Madden, market analyst at IG trading group, said “minutes from the Fed (meeting) left traders uneasy about an interest rate rise in the coming months”.
He added: “June is off the radar but dealers were left in no uncertain terms that a rate hike is on the horizon. Broadly speaking, equity markets are relatively strong and traders are hesitant to buy in at these levels when a rate rise at the end of summer is looming.”
Federal Reserve policymakers do not expect to increase its key interest rate in June, minutes from the April 28-29 policy meeting showed Wednesday.
A “few” officials thought that data collected by the June 16-17 meeting of the Federal Open Market Committee would likely show that the outlook had improved sufficiently to meet the central bank’s thresholds for raising the near-zero federal funds rate.
But generally, the April minutes reflected a “wait-and-see” attitude after a stall in US economic growth in the first quarter.
In foreign exchange trading yesterday, the euro rose to $1.1123 from $1.1096 late in New York on Wednesday.
However, the euro fell to a two-month low of 70.91 pence against the British pound before recovering slightly to 70.93 pence but still down on Wednesday’s value of 71.42 pence.
British retail sales rose far stronger than expected in April from the previous month, official data showed yesterday, with customers profiting from falling prices.
Sales by volume jumped by 1.2% last month compared with March, the Office for National Statistics said in a statement. Analysts’ consensus forecast had been for a gain of 0.4% after a fall in March.
With British inflation hitting negative territory, threatening deflation or a sustained period of falling prices, some analysts have warned that economic growth could be hit by consumers delaying purchases in the hope of further price falls.
But Scotiabank economist Alan Clarke said the latest retail sales figures point to the opposite happening.
US stocks rose in early trade yesterday following news that CVS Health would acquire senior pharmacy services company Omnicare for $12.7bn.
Around mid-day in New York, the Dow Jones Industrial Average was up 0.07% at 18,298.78 points.
The broad-based S&P 500 rose 0.26% to 2,131.48, while the tech-rich Nasdaq Composite Index advanced 0.31% to 5,087.51.