Sterling dips after downbeat U.K. data; Euro jumps on Greek relief, Spanish data

On Thursday the pound declined against the U.S. dollar, after the release of negative U.K. retail sales data, although hopes for a rate hike by the Bank of England later in the year continued to lend support.

The downbeat data doesn’t suggest, however, that the economy is overheating and in urgent need of an interest rate hike. And that’s why the pound just dropped by half a cent against the US dollar, The Guardian reported.

GBP/USD hit 1.5584 during European morning trade, the session low; the pair subsequently consolidated at 1.5597, easing 0.08%.

Earlier Thursday, the U.K. Office for National Statistics reported that retail sales dipped by 0.2% last month, disappointing forecasts for a gain of 0.3%. In May, retail sales rose by 0.3%, whose figure was revised from a previously reported gain of 0.2%.

Year-on-year, retail sales rose 4.0% in June, missing initial estimates for a 4.9% gain, after rising at a rate of 4.7% in May.

Core retail sales, which exclude automobile sales, fell by 0.2% last month, compared to forecasts for a 0.3% rise, after gaining 0.4% in May.

The pound had been supported after Bank of England Governor Mark Carney had said Friday the decision to raise interest rates from record lows would come into sharper focus around the end of 2015.

The pound was also lower against the euro with EUR/GBP last trading at 0.705300.

EUR/USD added 0.53% to settle at 1.0987.

The shared currency received a boost after Greece's parliament voted in favor of EU demands. The plan was supported by 230 lawmakers in the nation's 300-seat parliament, the main backing was from opposition parties. Of the ruling Syriza party’s 149 members, 31 voted against the deal and five abstained.

There is also encouraging news from Spain. According to research group Markit, the unemployment rate has fallen to 22.4% in the second quarter of this year, down from 23.8% in January-March.

Although this doesn’t resolve Spain’s jobs crisis (the worst in the eurozone after Greece), it does suggest that recent growth is finally feeding into the labor market.