The pound weakened against its most major counterparts in the European session on Friday, as UK retail sales grew less than expected in January.
Figures from the Office for National Statistics showed that retail sales rose 0.1 percent month-on-month in January, reversing a 1.4 percent drop in December. Economists had forecast a 0.5 percent rise.
Sales, excluding auto fuel, also grew only 0.1 percent, following December’s 1.5 percent decrease. Sales were expected to gain 0.6 percent.
Including auto fuel, retail sales volume increased 1.6 percent year-on-year in January, faster than the 1.5 percent growth logged in December but weaker than the expected 2.5 percent.
Excluding auto fuel, retail sales growth improved to 1.5 percent from 1.3 percent in the previous month. Economists were expecting a faster 2.4 percent expansion.
The currency traded mixed against its major rivals in the Asian session. While it held steady against the euro and the franc, it fell against the yen. Against the greenback, it rose.
The pound declined to a 2-day low of 1.2965 against the franc, from a high of 1.3011 hit at 9:00 pm ET. If the pound falls further, it may find support around the 1.28 level.
The pound reversed from an early 11-day high of 1.4145 against the greenback, falling to 1.4059. The next likely support for the pound is seen around the 1.38 area.
The pound dropped to 149.13 against the yen, following an advance to 149.96 at 8:00 pm ET. The pound is seen finding support around the 147.00 mark.
On the flip side, the pound reclaimed some of its lost ground against the euro with pair trading at 0.8876. This may be compared to a low of 0.8889 hit at 4:45 am ET. On the upside, 0.87 is likely seen as the next resistance for the pound.
Data from Destatis showed that Germany’s wholesale price inflation accelerated slightly in January, after easing in the previous three months.
Wholesale prices climbed 2.0 percent year-over-year in January, faster than the 1.8 percent rise in December.
Looking ahead, U.S. housing starts, building permits and import price index for January and University of Michigan’s preliminary consumer sentiment for February as well as Canada manufacturing sales for December will be out in the New York session.
The material has been provided by InstaForex Company – www.instaforex.com