British pound bounced off session lows versus the expanding US dollar on Thursday, as UK retail sales report stated stronger data in May than preliminary estimates.
GBP/USD pair pulled away from 1.5413, currently the session low and lowest value since June 6th, and reached 1.5478 during the late morning phase of European trade. Support was likely to be received at June 6th low, 1.5380, while resistance was to be met at current session high, 1.5495.
Earlier today the Office for National Statistics announced that Retail Sales in the United Kingdom increased by 2.1% in May on a monthly basis, far exceeding the projected 0.8% gain, while results in April showed a decline by 1.1%, revised up by 1.3%. Speaking in annual terms, UK retail sales registered a 1.9% gain in May, beating expectations of a mere 0.2% rise. Previous period results were revised up to 0.8% gain from 0.5%. It became clear that food sales rose by 3.5% during May, the most considerable increase in two years, while non-store retailing, which includes online sales was up by 4.3%. Data implied that UK consumers embraced supermarket promotions and were willing to spend, despite rising inflation rate and lowering rate of increase in remuneration, a combination proved unfavorable to their budgets. This crucial indicator may enhance experts expectations that UK economy will keep on the road to further expansion during the second quarter of the year. GDP added 0.3% during the first three months of 2013, while Bank of England projected an increase by 0.5% during Q2.
The pound was another currency, put under pressure after FED Chairman Ben Bernanke’s statement on Wednesday. He said that the central bank intended to scale back its asset purchases later in 2013 and exit it in the mid-2014, if US economy met the key economic indicator targets, set by the Federal Reserve.
Sterling climbed to session highs against the euro, as EUR/GBP cross lowered by 0.49% to 0.8543. The common currency slid against the US dollar and the pound after official report showed earlier, that PMI indicators in France, Germany and the Euro region as a whole remained in the contraction zone in June, below 50.0.
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