LONDON: The British pound rose slightly against the dollar on Friday but was headed for a weekly loss, as traders kept an eye on stalled peace negotiations between the US and Iran while some strong UK retail data barely moved the needle.
Sterling was 0.1 percent higher versus the dollar at USD1.348, as broader currency markets traded largely range-bound.
Against the euro, the pound fell 0.1 percent to 86.69.
UK retail sales for March rose more than expected, official data showed. British motorists worried about fuel price increases rushed to the pumps immediately after the start of the Iran war, pushing up total sales volumes for the country’s retail sector.
“There had been concerns that the uncertainty over the impact of the situation in the Middle East on household finances might dampen consumers’ appetite to spend, but even the figures for March were fairly robust,” Investec economists wrote in a note.
However the data comes hot on the heels of a survey that on Thursday showed British consumer morale slid this month to its lowest since October 2023 as households ramped up their expectations for price rises.
The war in the Middle East has caused a global energy price spike, fanning concern around inflation and growth.
Traders are betting on at least one 25-basis-point rate increase from the Bank of England this year, a marked reversal from before the war when they had been eyeing two.
The BoE will deliver its next policy decision on Thursday, with markets placing an 83 percent bet that the central bank will hold rates at 3.75 percent.
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