Pound Rises On Strong U.K. Retail Sales Data
The British pound strengthened against other major currencies in the European session on Friday, after data showed that U.K. retail sales volume rebounded in July as summer discounting and the European football Championship boosted department stores and sports equipment stores sales.
Markets speculate that the strong U.K. retail sales data is likely to diminish the possibility of Bank of England interest-rate cut.
Data from the Office for National Statistics showed that the U.K. retail sales increased 0.5 percent on a monthly basis in July, following a revised 0.9 percent fall in June. Economists had forecast sales to grow 0.6 percent.
Sales volumes advanced 1.4 percent in the year to July after poor weather impacted sales in July 2023. This follows a 0.3 percent decrease in June.
Both annual and monthly growth figures matched economists’ expectations.
In the European trading now, the pound rose to more than 2-week highs of 1.2886 against the U.S. dollar and 0.8525 against the euro, from early lows of 1.2846 and 0.8525, respectively. If the pound extends its uptrend, it is likely to find resistance around 1.30 against the greenback and 0.84 against the euro.
Against the Swiss franc, the pound advanced to more than a 2-week high of 1.1228 from an early low of 1.1204. The GBP/CHF pair may test resistance around the 1.15 region.
The pound edged up to 192.01 against the yen, from an early low of 191.49. The next possible upside target for the GBP/JPY pair is seen around the 199.00 region.
Looking ahead, Eurostat publishes euro area foreign trade data for June at 5:00 am ET in the European session.
In the New York session, Canada and U.S. housing starts for July, U.S. building permits for July, U.S. University of Michigan’s consumer sentiment index for August and U.S. Baker Hughes oil rig count data are slated for release.
