Sterling bulls were installed with fresh inspiration during Wednesday’s trading session after UK retail sales smashed market expectations by rising 1.0% in August.
Retail sales remain resilient and have risen for three months in a row despite inflationary pressures, which are likely to fuel speculation of the BoE raising interest rates in November. The growth rate for July was also revised higher by the ONS, from 0.3% to 0.6% which added to the overall positivity of the report. With expectations mounting over the BoE raising rates sooner than expected, Sterling which remains sensitive to monetary policy speculation is likely to venture higher.
Sterling/dollar climbed higher following the release, with prices clipping 1.3600. Bulls remain in control above 1.3500 with 1.3700 on the cards, if the current upside momentum holds.