LONDON: Sterling rose against the dollar and the euro on Thursday, helped by much better than expected retail sales numbers for November, a boost for an economy that had appeared to be cooling off.
The pound had shot lower against the dollar overnight along with a raft of other currencies in reaction to a statement on policy by the Federal Reserve, which was read as leaving it firmly on course to raise U.S. interest rates next year.
For much of this year, the Bank of England had been expected to move well before its U.S. counterpart, but the failure of inflation and, more importantly, wage growth to pick up has underpinned a sharp retreat in such expectations.
Helped by "Black Friday" discounts in late November, the run-up to Christmas has hinted that British consumer sentiment is continuing to improve. Retail sales for November were up 1.6 percent compared to a forecast 0.3 percent.
There was a limit to the optimism they generated, however, with some players using the blip higher to take profit.
"There were clearly some people betting these numbers would be strong," said Graham Davidson, a spot currency dealer with NAB in London. "Sterling rose steadily into the number and then came off a bit quite quickly afterwards."
"In general I'm pretty bearish on sterling going forward. I would tend to think it will head towards $1.53 over the course of the next month."
Sterling hit a day's high of $1.5664 after the sales numbers before retreating to $1.5648, up 0.4 percent on the day. Against the euro it gained just over half a percent to 78.79 pence. .
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