The British pound weakened against the other major currencies in the early European session on Thursday, after data showed that U.K. retail sales declined unexpectedly in June, eroding the prospects for higher interest rate.
Data from the Office for National Statistics showed that U.K. retail sales, including automotive fuel, declined 0.2 percent from prior month, reversing a 0.3 percent rise in May. This was the first drop in three months. Sales were expected to grow 0.4 percent.
On a yearly basis, growth in retail sales including automotive fuel eased unexpectedly to 4 percent from 4.7 percent in May. Economists had expected 4.8 percent expansion.
Excluding automotive fuel, the sales dropped 0.2 percent. While economists had forecast sales to gain 0.4 percent again as seen in May. On a yearly basis, sales growth, excluding auto fuel, slowed to 4.2 percent from 4.5 percent and was also slower than the 5.1 percent gain expected by economists.
In the Asian session today, the pound held steady against its major rivals.
In the European trading now, the pound fell to 9-day lows of 0.7055 against the euro and 1.4865 against the Swiss franc, from early highs of 0.6988 and 1.4994, respectively. If the pound extends its downtrend, it is likely to find support 0.72 around against the euro and 1.46 against the franc.
Pulling away from an early 6-day high of 1.5669 against the U.S. dollar, the pound dropped to 1.5583. On the downside, 1.53 is seen as the next support level for the pound.
Against the yen, the pound edged down to 192.91 from an early high of 193.90. The pound may test support near the 188.00 region.
Looking ahead, U.S. weekly jobless claims for the week ended July 18, U.S. leading indicators for June, Canada retail sales data for May and Eurozone flash consumer sentiment index for July are due to be released in the New York session.
At 10:15 am ET, German Bundesbank President Jens Weidmann is expected to speak about financial market integration from a central bank perspective in Frankfurt.
The material has been provided by InstaForex Company – www.instaforex.com