Pound off 1-month highs after retail sales data

The British pound lost momentum on Thursday (23 April) and moved off one-month highs versus the dollar, the euro and the yen on weaker than expected retail sales figures and rising public borrowing.

Retail sales in the UK grew only 4.2% from a year earlier in March, much lower than the 5.4% growth recorded for February while the market had been expecting a growth rate of 5.4%.

The ex-fuel measure of the sales growth came in at 5%, disappointing analysts who had been expecting a 5.4% growth. The February rate was revised to 4.8% from 5.1%. On a monthly basis, ex-fuel retail sales fell 0.5% when the consensus was for just a slowdown in the growth to 0.4% from 0.6%.

Another release showed that public sector net borrowing of the UK rose to £6.741tn for March from £4.801tn in February. The February number was a revision from £6.216tn in the prior estimate.

The GBP/USD slipped to 1.4959 from the previous close of 1.5036 moving off Wednesday's one-month high of 1.5082. The GBP/JPY fell to 179.31 from 180.47, the one-month low touched earlier in the day.

Against the euro, the sterling remained firm and touched a new one-month high as data from the eurozone was also worse and outweighed the impact of the negative UK data.

The EUR/GBP slipped to 0.71116 from the previous close of 0.7133 before rebounding on the UK data to 0.7126.

US weekly jobless data, March housing market data and April Markit PMI are expected to impact trading in currencies later in the day.