LONDON (AFX) - The euro and sterling both faltered slightly in an initial reaction to a stronger-than-expected January retail sales figure in the U.S. which suggested that the slowdown in the U.S. may not be as pronounced or as protracted as previously estimated, dealers said.
U.S. retail sales rose 0.7 pct in January, the fastest since September, while excluding autos, retail sales rose 0.8 pct, marking the biggest gain since July.
The consensus forecast of Wall Street economists was for retail sales to rise 0.5 pct and for sales excluding autos to rise by 0.3 pct.
Although it would be too much to say that a single piece of good news indicates that the U.S. economy is not slowing rapidly, the initial market reaction has been dollar positive, Kamal Sharma, currency strategist at Commerzbank said.
"Also encouraging is the fact that there were no downward revisions in the December data," he added.
Fed chairman Alan Greenspan is very likely to use this data to show that all is not lost for the U.S. economy, Sharma said.
The euro slipped slightly to 0.9253 usd from 0.9275 before the release while sterling eased to 1.4530 usd from 1.4560.