Pound remains at 18-month lows vs dollar despite upbeat retail sales data
On Friday the pound stayed near 18-month lows against the U.S. dollar, despite the release of optimistic retail sales data as expectations
for the Bank of England to hold its monetary policy for longer continued
to weigh.
GBP/USD touched 1.4958 during European morning trade, the pair's lowest since July 2013; the pair subsequently consolidated at 1.4985, slipping 0.17%. The pair was likely to find support at 1.4812 and resistance at 1.5213, Thursday's high. The Office for National Statistics said that U.K. retail sales rose 0.4% in December, beating expectations for a 0.6% decline, after a 1.6% increase the previous month.
Year-on-year, retail sales increased by 4.3% last month, more than the expected 3.0% rise, after a 6.4% advance in November.
The British currency remained under pressure after the minutes of the BoE's January policy meeting on Wednesday showed that members voted unanimously for the first time in five months to keep interest rates unchanged at a record-low 0.5%.
Sterling was hovering close to seven-year highs against the euro, with EUR/GBP dropping 0.71% to 0.7516.
The single currency remained broadly pressured after European Central Bank President Mario Draghi on Thursday said it will make monthly purchases of €60 billion per month, starting in March and continuing until late 2016.
The euro was not influenced by data released Friday showing that the Markit preliminary composite purchasing managers' index, which measures activity in the manufacturing and services sectors in the euro area, rose to 52.2 this month from a reading of 51.4 in December. Economists had expected the index to rise to 51.8 in January.
In Germany, the preliminary manufacturing PMI ticked down to 51.0 this month from 51.2 in December, compared to expectations for a rise to 51.7, while the preliminary services PMI rose to 52.7 in January from 52.1 the previous month, exceeding expectations for a rise to 52.5.
Later in the day, the U.S. was to release preliminary data on manufacturing activity and a private sector report on existing home sales.
