Sterling rose against the euro and the dollar on Thursday after UK retail sales data beat expectations, but gave up most of those gains as some investors took the opportunity to sell into the bounce. Analysts and traders said the retail sales data did not change things fundamentally and UK growth prospects still looked patchy and consumer confidence fragile. That made it hard for sterling to hold gains with most expecting the Bank of England to keep interest rates on hold this year.
Sterling was flat at $1.6175, having risen to $1.6208 during the session. Traders cited decent selling by a US investment bank, although support is seen below $1.6120 with bidding interest from investors including sovereign accounts said to be layered there. The euro was down 0.1 percent at 88.03 pence, having fallen to as low as 87.92 pence after the retail sales data was released. Near term support for the euro is seen at 87.78 pence-the 55-day moving average-while near term resistance was at 88.41 pence, the high struck on May 18. British retail sales for April rose 1.1 percent, handily beating expectations of a 0.8 percent, boosted by the extra holiday for the Royal Wedding and record high temperatures.
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