British pound managed to preserve gained positions against the US dollar, after pulling back from session lows earlier on Thursday, following a report to show UK retail sales increased for a second month in a row during June.
GBP/USD recorded a session low at 1.5156 at 7:10 GMT, while at 12:00 GMT the pair was trading at 1.5222, up by 0.05% for the day. Support was expected at July 17th low, 1.5077, while resistance was to be encountered at July 17th high, 1.5266.
Earlier on Thursday the Office for National Statistics reported that retail sales in the United Kingdom increased for a second month in a row in June and eased the aroused concerns over economic outlook in the country. Data showed that the total sales rose by 0.2% during June, lower compared to Mays rate of increase, 2.1%, slightly mismatching preliminary estimates of a 0.3% rise. In annual terms, retail sales climbed 2.2% in June, as in May the indicator added 2.1%, according to revised data. In addition, retail sales, excluding volatile components such as fuel costs, rose by 0.2% in June in line with projections, after an increase by 2.1% a month ago. Annually, retail sales ex fuel indicator in the United Kingdom advanced 2.1% in June, beating expectations of a 1.6% increase.
Also on Wednesday, it became clear that all 9 members of Bank of England’s Monetary Policy Committee voted unanimously in favor of preserving the current size of monetary stimulus, according to the minutes from the central bank’s meeting in July. However, two policymakers, who had previously voted in favor of more stimulus, stated that it remained “warranted”.
Meanwhile, Federal Reserve Chairman Ben Bernanke, in his congressional testimony yesterday, said that the scale of monetary stimulus was not on a “preset course” and depended on that how economy performed. Thus, if economic growth strengthened, the easing program could be tapered at a faster pace, while in case of the opposite situation, deteriorating economic results, the scale of asset purchases could be even increased. The Chairman also mentioned that, given the low inflation rate, the central bank was ready to act if necessary, in order to maintain price stability and keep inflation close to the targeted annual rate of 2%.
Elsewhere, the sterling advanced against the euro, as EUR/GBP cross dropped by 0.23% to 0.8609. GBP/JPY pair, on the other hand, climbed 0.57% to reach 152.40.
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