Investing.com - The pound moved lower against the U.S. dollar on Thursday, weighed by the release of downbeat U.K. retail sales data and as investors were awaiting the Bank of England’s policy decision due later in the day.
GBP/USD hit 1.2704 during European morning trade, the pair’s lowest since Tuesday; the pair subsequently consolidated at 1.2708, shedding 0.30%.
Cable was likely to find support at 1.2639, Tuesday’s low and resistance at 1.2818, Wednesday’s high.
The U.K. Office for National Statistics said that retail sales fell 1.2% in May, compared to expectations for a 0.8% fall and after a revised 2.5% increase the previous month.
Year-on-year, retail sales increased by 0.9% last month, compared to forecasts for a 1.7% rise.
Core retail sales, which exclude automobiles and fuel, decreased by 1.6% in May, compared to forecasts for a 0.8% slide.
The pound also remained under pressure amid mounting political uncertainty in the U.K. as Prime Minister Theresa May faces calls to soften her stance on Brexit days before negotiations on leaving the EU begin.
Later Thursday, the BoE was expected to leave its monetary policy unchanged but market participants will be looking for potential clues on future policy moves.
In the U.S., the Federal Reserve raised interest rates from 1.00% to 1.25%, in a widely expected move on Wednesday. However, disappointing U.S. inflation data released the same day raised questions about whether the central bank will be able to hike rates again later this year.
The greenback also remained vulnerable amid ongoing U.S. political turmoil. The Washington Post reported on Wednesday that U.S. President Donald Trump is being investigated by special counsel Robert Mueller for possible obstruction of justice.
Sterling was little changed against the euro, with EUR/GBP at 0.8802.