Investing.com - The pound remained weaker against the slightly stronger U.S. dollar on Thursday despite data showing that UK retail sales grew at a faster than expected pace in June.
GBP/USD was at 1.2969 by 05.24 a.m. ET (09.24 a.m. GMT), not far the day’s lows of 1.2973.
The Office for National Statistics reported that retail sales rose 0.6% last month, compared to forecasts for an increase of 0.4% after falling 1.1% in May.
Retail sales were up 2.9% on a year-over-year basis, ahead of forecasts for growth of 2.5%.
The increase was helped by warmer weather which helped boost sales of summer clothing and offset declines in food and fuel sales the ONS said.
The report indicated that consumer spending is continuing to hold up in the face of rising inflation, which is eroding household incomes.
Inflation has accelerated sharply since last year’s Brexit vote as the steep fall in sterling pushed up import prices, leading to fears over a squeeze on living standards with wages lagging rising prices.
Sterling was lower against the euro, with EUR/GBP rising 0.28% to 0.8865 ahead of the upcoming European Central Bank meeting later in the day.
Investors were awaiting fresh clues on the future of the banks stimulus program from ECB President Mario Draghi.
The U.S. dollar ticked higher against a basket of the other major currencies, taking a breather after steep falls in recent sessions.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.22% to 94.85, still not far from the 11-month low of 94.27 touched on Tuesday.
The dollar has come under pressure amid mounting speculation that the subdued inflation outlook will undermine that case for the Federal Reserve to raise interest rates once more this year as policymakers have indicated.
The prospect that other central banks may join the Fed in policy tightening has also fed into dollar weakness.
The dollar has also been pressured lower as failed attempts by Republicans to reform healthcare indicated that President Donald Trump’s other legislative efforts, such as overhauling the tax code and implementing fiscal stimulus could face difficulties.