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Sterling Higher Than Dollar Due To Positive UK Retail Data

Sterling edged higher versus the dollar on Friday but was unchanged versus the euro, helped by better-than-expected UK retail sales numbers.

Versus the dollar, sterling rose 0.1% to $1.3622 GBP=D3.

Against the single currency, the pound was little changed at 83.427 pence, reversing some of the 0.35% gain made on Thursday. EURGBP=D3

Retail Bounce

The flat start comes despite positive UK retail sales data published Friday, showing a stronger than expected bounce.

Sales volumes in the UK in January rose 1.9% from the previous month, surpassing forecasts of 1.2%, as consumers began to return to more normal buying behaviours post-pandemic, reversing some of the 4% drop seen in December 2021.

"However, the key issue going forward will be whether this apparent bounce back in consumption will be able to withstand the forthcoming increase in taxation and energy bills set to hit in April, which together will take a significant chunk out of worker pay packets," said Stuart Cole, head macro economist at Equiti Capital.

Expectations of a rate hike by the Bank of England continue to provide some support for the pound, with data published this week showing inflation rising to a nearly 30-year high.

News by Reuters, edited for Checkout Magazine by Conor Farrelly. Click sign up to subscribe to Checkout.

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