Forex Pros – The pound surged to a 16-month high against the U.S. dollar on Thursday, after official data showed that U.K. retail sales rose unexpectedly in March, while public sector borrowing for the fiscal year ending in March came in below the government’s target.
GBP/USD hit 1.6564 during European morning trade, the pair’s highest since December 4, 2009; the pair subsequently consolidated at 1.6557, jumping 0.89%.
Cable was likely to find support at 1.6306, Wednesday’s low and resistance at 1.6721, the high of December 3, 2009.
The Office for National Statistics said retail sales volumes including automotive fuel rose 0.2% last month after dropping by a upwardly revised 0.9% the month before. Analysts had expected retail sales to drop by 0.5% in March.
The ONS said the rise was driven by stronger food sales and non-store retailing, with garden centers and sports good stores helped by dry weather in March.
A separate report said that public sector net borrowing excluding financial sector interventions came in at GBP141.1 billion, comfortably below the GBP145.9 billion predicted by the Office for Budget Responsibility at last month’s annual budget.
The pound was also higher against the euro, with EUR/GBP slipping 0.15% to hit 0.8836.
Later in the day, the U.S. was to publish official data on initial jobless claims and house prices. Also Thursday, the Federal Reserve Bank of Philadelphia was to publish an index of manufacturing activity.
ForexPros.com
