Investing.com - The pound turned lower against the U.S. dollar on Friday, after the release of weak U.K. retail sales data, although the greenback’s gains were expected to remain limited ahead of Donald Trump’s inauguration ceremony later in the day.
GBP/USD hit 1.2290 during European morning trade, the session low; the pair subsequently consolidated at 1.2296, shedding 0.40%.
Cable was likely to find support at 1,2119, the low from January 13 and resistance at 1.2417, Wednesday’s high.
The U.K. Office for National Statistics said on Friday that retail sales declined 1.9% in December, confounding expectations for a 0.1% slip. Retail sales fell 0.1% in November, whose figure was revised from a previously estimated 0.2% rise.
Year-on-year, retail sales increased by 4.3% last month, compared to expectations for a 7.2% climb.
Core retail sales, which exclude automobiles, dropped 2.0% in December, disappointing expectations for a 0.3% fall.
The pound had rallied after British Prime Minister Theresa May confirmed on Tuesday that Britain will be leaving the single market when it exits the European Union, but would seek maximum access to it through a new trade agreement.
May also said the final Brexit deal will be put to parliament for a vote.
Meanwhile, sentiment on the U.S. dollar remained vulnerable ahead of Donald Trump’s inauguration speech amid sustained uncertainty over the new U.S. administration’s fiscal and economic policies.
The greenback had found support late Thursday when Federal Reserve Chair Janet Yellen said the central bank should continue to raise interest rates, but slowly.
Speaking at a conference in San Francisco, Yellen said that "allowing the economy to run markedly and persistently ‘hot’ would be risky and unwise," before adding: "I consider it prudent to adjust the stance of monetary policy gradually over time."
Sterling was also lower against the euro, with EUR/GBP rising 0.27% to 0.8664.