The pound hit a two-week high on Thursday (18 August), after better-than-expected retail sales data showed British consumers had not been hit by the uncertainty following the Brexit vote in June.

Following the release, the pound climbed as high as $1.3175 and €1.1634 before settling at $1.3147 and €1.1601 by mid-afternoon, an increase of 0.81% and 0.46% respectively on the previous day.

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Figures released by the Office for National Statistics showed retail sales jumped 1.4% in July, well above the 0.1% increase expected by analysts and marking a sharp rebound from the previous month's 0.9% decline.

"We will have to see whether this positive momentum carries on through the summer and autumn, but resilient consumer spending will be critical to keeping the UK economic recovery going in the face of an expected decline in business investment following the referendum result," said John Hawksworth, chief economist at PwC.

"Together with yesterday's stronger-than-expected labour market figures, early indications from official data are that the initial negative economic impact of the Brexit vote may not have been as bad as more subjective indications from consumer and business confidence surveys suggested."

Elsewhere, the dollar fell 0.16% to 0.8836 euro cents, after minutes from the latest Federal Reserve meeting released on Wednesday night, showed policymakers at the US central bank remained divided on the prospect of a near-term rate increase.

The minutes showed several members of the Federal Open Market Committee (FOMC) were concerned about the financial risks deriving from low interest rates, although many believed there was enough time to act if inflation rises. To complicate things further, a number of members indicated they want to wait for more economic data to judge the health of the US economy.

"This [the content of the minutes] has been taken as a sign that there may not be a rate hike in the remainder of this year, and was considered particularly dovish in light of FOMC member William Dudley's comments earlier this week that the market shouldn't rule out a rate hike in September," said Joshua Mahony, market analyst at IG.

The greenback, however, climbed 0.11% against the yen to ¥100.39.

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