Forexpros – The pound erased losses against the U.S. dollar on Thursday, after official data showed that U.K. retail sales rose unexpectedly last month, but gains were limited as diminished expectations for more easing continued to support the greenback.
GBP/USD pulled back from 1.5637, the pair’s lowest since August 10, to hit 1.5692 during European morning trade, inching up 0.05%.
Cable was likely to find support at 1.5637, the session low and near-term resistance at 1.5727, Tuesday’s high and a two-week high.
The Office for National Statistics said U.K. retail sales rose by a seasonally adjusted 0.3% in July, defying expectations for a 0.1% decline.
Retail sales for June were revised up to a 0.8% gain from a previously reported increase of 0.1%.
Retail sales rose at an annualized rate of 2.8% in July, blowing past expectations for a 1.4% increase, after rising at a rate of 1.6% in the preceding month.
Core retail sales, which exclude automobile sales, were flat last month, compared to expectations for a 0.2% decline, after climbing 1.1% in June.
The ONS said there was no evidence that the Olympics had any impact on retail sales.
The data came one day after the minutes of the Bank of England’s August meeting showed that policymakers voted unanimously to keep U.K. interest rates steady at 0.5% and to leave the quantitative easing program unchanged at GBP375 billion.
Also Wednesday, official data showed that the number of people claiming unemployment benefits in the U.K. fell unexpectedly in July and the nation’s unemployment rate ticked down to 8% from 8.1% in June.
The pound has come under pressure in recent week as sustained concerns over the outlook for the U.K. economy stoked fears that weak economic data could prompt the BoE to implement another round of stimulus measures, which would be negative for the pound.
But the dollar remained broadly stronger after upbeat U.S. retail sales data earlier in the week dampened expectations for another round of quantitative easing by the Federal Reserve.
The pound was also higher against the euro, with EUR/GBP down 0.20% to 0.7820.
Later Thursday, the U.S. was to publish official data on building permits and housing starts, as well as weekly government data on unemployment claims and data on manufacturing activity in the Philadelphia area.
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