Currencies

LONDON (ShareCast) - The dollar rallied against other major currencies on the back of comments from the Fed.

The Fed kept interest rates close to zero as expected, but the central bank said, though weak, the US economy is showing signs of a recovery. It also said inflation will remain subdued for sometime.

Sterling slipped against the dollar after the news, having posted gains against the greenback for much of the day.

The pound was also under pressure later in the day when Bank of England head Mervyn King expressed concerns about how quickly the UK economy will prick up from the recession.

Meanwhile, the retail sales balance in June remained unchanged from May's figure of -17. Economists were predicting a slightly better June performance, with the consensus going for a balance of -16.