The British pound gained momentum against major currencies during the European session on Friday, following the release of unexpected growth in UK retail sales for September, driven by higher technology product sales. The better-than-expected retail sales figures could influence speculation regarding the Bank of England’s (BoE) potential rate-cut trajectory.
Data from the Office for National Statistics revealed a 0.3% monthly increase in UK retail sales for September, defying predictions of a 0.3% decline. This marks the third consecutive month of growth, following increases of 1.0% in August and 0.8% in July.
Excluding auto fuel, retail sales also rose by 0.3%, a slower pace compared to the previous month’s 1.1% rise. Year-on-year, retail sales surged by 3.9% in September, the strongest growth since February 2022, surpassing forecasts of a 3.2% increase. Excluding auto fuel, retail sales were up 4.0%, following a 2.2% rise in August.
Meanwhile, European stock markets rose after the European Central Bank (ECB) cut its deposit rate by 25 basis points to 3.25%, citing slow economic growth and easing inflation. The ECB’s latest quarterly forecast predicts inflation falling to 1.9% in 2025, down from a previous estimate of 2%.
In European trading, the pound reached a 2-1/2-year high of 0.8295 against the euro and a nearly 3-month high of 196.06 against the yen. Should the pound maintain its upward trajectory, it could face resistance at 0.81 against the euro and 200.00 against the yen.
Against the Swiss franc and U.S. dollar, the pound advanced to a near 3-week high of 1.1320 and a 2-day high of 1.3072, respectively. Resistance could be tested at 1.15 against the franc and 1.35 against the dollar.
Looking ahead, investors await U.S. building permits and housing starts data for September, as well as the Baker Hughes oil rig count.
Source: https://www.rttnews.com/
