Investing.com - The pound jumped to session highs against the dollar on Thursday after data showing that U.K. retail sales rose at a faster than expected rate in April, boosting optimism over the economic outlook.
GBP/USD was up 0.83% to 1.5664 from around 1.5600 before the data.
The Office for National Statistics said retail sales rose 1.2% last month, boosted by higher sales of clothing and footwear, far more than forecasts for a 0.4% increase.
Retail sales were 4.7% higher on a year-over-year basis, ahead of expectations for a 3.8% increase.
Core retail sales, which exclude automobile sales, were up 1.2% last month, compared to forecasts for a 0.3% rise, after gaining 0.2% in March.
The ONS also said average store prices were lower for the tenth consecutive month, down 3.2% from a year earlier.
Data earlier in the week showed that the U.K. entered into negative inflation in April for the first time since 1960, with the annual rate of inflation falling 0.1% after remaining flat in the previous two months.
However, the Bank of England has said that record low inflation rates are not likely to continue for long and that consumer prices will pick up notably towards the end of the year.
Elsewhere, sterling was higher against the euro, with EUR/GBP easing to 0.7123.
In the euro zone, data on Thursday showed that euro zone private sector growth slowed for a second straight month in May, but indicated that the economic recovery is still on track.
The preliminary reading of the euro zone composite purchasing managers' index, which looks at both manufacturing and service sector activity, fell to 53.4 from a final reading of 53.9 and below forecasts for 53.8.