Investing.com - The pound touched fresh seven-month highs against the broadly weaker dollar on Thursday when data showed that U.K. retail sales rose last month, after the latest Federal Reserve tempered expectations for higher interest rates this year.
GBP/USD touched highs of 1.5928, the most since November 2014, and was last at 1.5893, little changed from earlier.
The Office for National Statistics said retail sales ticked up 0.2% in May, in line with forecasts.
April's figure was revised down to show a gain of 0.9%, from a previously reported 1.2%.
Consumer purchases were up 4.6% from a year earlier, slightly below expectations for a 4.8% gain, following a similar gain in April.
Core retail sales, which exclude automobile sales rose 0.2% last month, compared to forecasts for a 0.1% rise.
The greenback remained broadly weaker after the Federal Reserve tempered expectations for a rate hike, saying that markets should not focus on the timing of an initial interest rate increase.
The Fed lowered both its U.S. growth forecast and its interest-rate projections on Wednesday, prompting investors to push back expectations on the timing of an initial rate hike.
Fed Chair Janet Yellen said the central bank wanted to see “more decisive evidence” of sustained growth before raising rates, but acknowledged that the economy has “expanded moderately” after a weak first quarter.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, slid to almost five-week lows of 94.4.
The euro weakened slightly against sterling following the upbeat U.K. data, with EUR/GBP last at 0.7162 from 0.7175 earlier.
Sentiment on the single currency remained fragile as a deadlock between Greece and its international lenders continued ahead of the approaching deadline for Greece’s repayments to the International Monetary Fund at the end of the month.
A default by Greece could lead to the country’s exit from the euro zone.
The Greek central bank warned Wednesday that the country could be plunged into an “uncontrollable crisis”, unless a deal is agreed soon.
European finance ministers were to hold talks in Brussels later Thursday, but expectations for a deal were not high.