Investing.com - The pound extended early gains against the dollar and the euro on Thursday after data showing that U.K. retail sales jumped in April, despite a steep drop in clothing sales which may have been due to unseasonable weather.
The Office for National Statistics said retail sales rose 1.3% in April, well above economists’ forecasts for an increase of 0.5%.
March’s figures were revised to show a 0.5% drop, a much smaller decline than the initial estimate of a fall of 1.3%.
Retail sales volumes were up 4.3% on a year over-year basis, the report said.
Sales of most items surged, but clothing sales fell by 6.3% the ONS said, perhaps due to cold weather in April, which hit sales of summer clothes.
GBP/USD was up 0.32% at 1.4645 from around 1.4626 ahead of the report.
The pound rose to the highest level in three-and-a-half months against the euro, with EUR/GBP down 0.3% to 0.7661.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last at 95.16, not far from the seven-week peaks of 95.33 hit overnight.
Demand for the dollar continued to be underpinned after the minutes of the Federal Reserve’s April meeting indicated that interest rates could rise as soon as next month.
Wednesday’s Fed’s April meeting minutes showed that officials said a June rate hike would be appropriate if economic data indicated that growth was picking up in the second quarter.
The U.S. central bank hiked rates in December for the first time in almost a decade.
Economic data earlier in the week showed that U.S. consumer prices rose at the fastest rate in three years in April, while industrial output and housing starts both rebounded.
The upbeat data indicated that the economy was regaining momentum at the start of the second quarter after growth slowed sharply in the first quarter.