BRUSSELS (dpa-AFX) - The British pound strengthened against other major currencies in the European session on Friday, after data showed that U.K. retail sales logged an unexpected growth in September on higher sales of technology products.
Positive retail sales statistics may impact conjecture over the Bank of England (BoE) rate-cut trajectory.
Data from the Office for National Statistics showed that U.K. retail sales grew 0.3 percent on month in September, confounding expectations for a 0.3 percent fall. This marked the third consecutive increase. Sales had increased 1.0 percent in August and 0.8 percent in July.
Similarly, retail sales, excluding auto fuel gained at a slower pace of 0.3 percent after rising 1.1 percent a month ago. Sales were forecast to fall 0.3 percent.
In September, retail sales advanced 3.9 percent from the last year, the strongest since February 2022. Sales were forecast to climb 3.2 percent after an increase of 2.3 percent in August.
Excluding auto fuel, retail sales grew 4.0 percent, following a 2.2 percent rise in the previous month.
European stock markets traded higher after the European Central Bank (ECB) cut its deposit rate by 25 basis points to 3.25 percent, citing sluggish economic growth and easing inflation.
According to its quarterly survey of professional forecasters, the ECB sees inflation falling to 1.9 percent in 2025 from a previous forecast of 2 percent. The projections for 2024 and 2026 were kept unchanged at 2.4 percent and 1.9 percent.
The British sterling held steady against its major counterparts in the Asian trading today.
In the European trading now, the pound rose to a 2-1/2-year high of 0.8295 against the euro and nearly a 3-month high of 196.06 against the yen, from early lows of 0.8328 and 195.04, respectively. If the pound extends its uptrend, it is likely to find resistance around 0.81 against the euro and 200.00 against the yen.
Against the Swiss franc and the U.S. dollar, the pound advanced to nearly a 3-week high of 1.1320 and a 2-day high of 1.3072 from early lows of 1.1269 and 1.3011, respectively. The pound may test resistance around 1.15 against the franc and 1.35 against the greenback.
Looking ahead, U.S. building permits for September, housing starts for September and U.S. Baker Hughes oil rig count data are slated for release in the New York session.
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