Forexpros – The pound trimmed losses against the U.S. dollar on Thursday, after official data showed that U.K. retail sales rebounded last month, following April’s steep decline.
GBP/USD pulled away from 1.5658, the session low, to hit 1.5699 during European morning trade, still down 0.12% on the day.
Cable was likely to find support at 1.5614, the low of June 19 and resistance at 1.5776, Wednesday’s high and a one-month high.
The U.K. Office for National Statistics said retail sales rose by a seasonally adjusted 1.4% in May, beating expectations for a 1.2% gain.
Retail sales for April were revised down to a 2.4% drop from a previously reported decline of 2.3%.
But market sentiment remained downbeat following a report showing that manufacturing activity in Germany slowed to the lowest level in three years in June as the ongoing euro zone crisis hit export demand.
Meanwhile, investors remained jittery ahead to the outcome of an audit of Spanish banks later in the day, amid concerns that the results could show that a EUR100 billion bailout for the country’s banks agreed earlier this month would not be large enough.
The greenback remained supported after the Federal Reserve announced that it is extending the current bond buying program, known as “Operation Twist”, until the end of the year and said that it was ready to take additional steps. The bond purchasing program had been due to expire this month.
The announcement disappointed market expectations for more aggressive measures to shore up growth in the world’s largest economy, following a recent string of weak U.S. data.
The pound was higher against the euro, with EUR/GBP sliding 0.23% to trade at 0.8065.
Later in the day, the U.K. was to release a report on industrial order expectations.
The U.S. was to produce government data on unemployment claims, followed by preliminary data on manufacturing activity and an industry report on existing home sales. The country was also to release data on manufacturing activity in the Philadelphia area.
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