The pound firmed against its major opponents in early European deals on Thursday, as U.K. retail sales climbed at a faster-than-expected pace in September, driven mainly by falling in-store prices and promotions around the Rugby World Cup.
Data from the Office for National Statistics showed that retail sales including automotive fuel grew 1.9 percent month-over-month in September, exceeding economists’ expectations for a 0.4 percent rise.
Excluding auto fuel, retail sales rose 1.7 percent monthly in September, faster than the 0.4 percent climb expected by economists.
The European Central Bank will announce its monetary policy decision later in the day and is widely expected to refrain from announcing any additional stimulus measures. However, President Mario Draghi may attempt to maintain the delicate balancing act of talking about action if needed.
In a lecture at Oxford University on Wednesday, the Bank of England governor Mark Carney told that Britain’s membership in the European Union had increased the openness of the economy to trade and thus improved the dynamism of the economy.
“Overall, EU membership has increased the openness of the U.K. economy, facilitating dynamism but also creating some monetary and financial stability challenges for the Bank of England to manage,” he added.
Yesterday, the pound lifted up after data showed that U.K. budget deficit narrowed in September to least since 2007.
In Asian deals, the pound showed mixed performance against its key counterparts. While it rose against the euro, it trended lower against the greenback and the yen. Against the franc, it held steady.
The pound appreciated to 0.7295 against the euro, its strongest since September 23, and was up by 0.86 percent from a low of 0.7358 hit 8:00 pm ET. The pound is likely to find resistance around the 0.715 zone.
The pound climbed to a weekly high of 1.5507 against the greenback and a 2-week high of 1.4892 against the Swiss franc, from its previous lows of 1.5410 and 1.4781, respectively. If the pound extends rise, it may locate resistance around 1.56 against the greenback and 1.50 against the franc.
The pound advanced to 185.56 against the Japanese yen, after having fallen to a 3-day low of 184.50 at 12:30 am ET. The pound is seen finding resistance near the 187.00 level.
Looking ahead, the European Central bank will announce its interest rate decision at 7:45 am ET. Economists expect the bank to retain interest rates unchanged at 0.05 percent.
Following the announcement, European Central Bank President Mario Draghi will hold the customary post-meeting press conference at 8:30 am ET.
In the New York session, U.S. weekly jobless claims for the week ended October 17, U.S. house price index for August, existing home sales data for September, leading indicators for September, Canada retail sales data for August and Eurozone consumer confidence index for October are slated for release.
At 2:30 pm ET, Bank of England Deputy Governor for Prudential Regulation and Chief Executive of Prudential Regulation Authority Andrew Bailey will deliver a speech at the Lord Mayor’s annual city banquet, in London.
The material has been provided by InstaForex Company – www.instaforex.com