Investing.com - The pound held gains against the U.S. dollar on Friday, as earlier U.K. retail sales continued to support, although investors remained cautious after the release of weak U.S. economic reports.
GBP/USD hit 1.6458 during U.S. morning trade, the pair's highest since January 14; the pair subsequently consolidated at 1.6437, climbing 0.51%.
Cable was likely to find support at 1.6310, the session low and resistance at 1.6508, the high of January 13.
The pound strengthened earlier, after official data showed that U.K. retail sales increased by 2.6% in December, far more than the expected 0.4% rise. Retail sales in November were revised down to a 0.1% rise from a previously estimated 0.3% gain.
Meanwhile, in a preliminary report, the University of Michigan said its consumer sentiment index fell to 80.4 in January, from a reading of 82.5 the previous month, confounding expectations for a rise to 83.5.
The report came after official data showed that U.S. building permits declined 3% to 0.986 million units in December, from 1.017 million units the previous month. Analysts had expected building permits to slip to 1.015 million units last month.
Data also showed that U.S. housing starts rose dropped 9.8% to 0.999 million units in December, from an upwardly revised 1.107 million units in November, compared to expectations for a decline to 0.990 million units.
The reports came as U.S. economic data released on Thursday was viewed as too soft to prompt the Federal Reserve to speed up the pace at which it tapers monthly asset purchases.
Separately, Federal Reserve Chairman Ben Bernanke on Thursday said the central bank should be giving the economy the stimulus it needs despite worries that quantitative easing may destabilize the financial system.
Sterling was also higher against the pound, with EUR/GBP retreating 0.86% to 0.8256.