Forex Pros – The pound extended gains against the U.S. dollar on Thursday, surging to a fresh 16-month high, after a government report showing that U.K. retail sales rose unexpectedly in March, driven by stronger food sales.
GBP/USD hit 1.6569 during European early afternoon trade, the pair’s highest since December 4, 2009; the pair subsequently consolidated at 1.6550, advancing 0.86%.
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 an upwardly revised 0.9% the month before. Analysts had expected retail sales to fall 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.
Meanwhile, a separate report said that U.K. 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 shedding 0.28% to hit 0.8824.
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
