Pound Climbs On Strong U.K. Retail Sales Data

The pound gained ground against its major rivals in European deals on Thursday, after data showed that the U.K.'s retail sales growth accelerated unexpectedly in November, indicating that economy on track for recovery.

Retail sales volume including automotive fuel increased 1.6 percent in November from October, the Office for National Statistics said. The monthly growth was expected to slow to 0.4 percent from 1 percent in October.

Excluding automotive fuel, retail sales advanced 1.7 percent versus 1 percent increase in October. Economists had forecast sales to rise marginally by 0.3 percent.

On a yearly basis, the increase in overall sales volume accelerated to 6.4 percent in November from 4.6 percent. The growth was forecast to ease to 4.4 percent.

Likewise, the annual growth in sales excluding auto fuel improved to 6.9 percent from 4.9 percent, while it was expected to ease to 4.5 percent.

A rally in European stocks also benefited the pound. The Swiss National Bank's surprise rate cut and the Federal Reserve's assurance to begin tightening by next year restored confidence over global growth.

The pound advanced 0.7 percent to 1.5662 against the greenback, from a low of 1.5548 hit at 2:15 am ET. Continuation of the pound's uptrend may take it to a resistance around the 1.58 zone. The pair was worth 1.5572 at yesterday's close.

The pound remained firm at early 10-day against the franc, trading at 1.5312. At Wednesday's close, the pair was quoted at 1.5150. If the pound extends rise, 1.54 is seen as its next possible resistance level.

The Swiss National Bank decided to introduce negative interest rate to contain the demand for the currency and reaffirmed that it will defend the currency ceiling at an unscheduled meeting today.

The central bank imposed an interest rate of -0.25 percent on sight deposit account balances at the SNB, with an intention to take the key three-month libor into negative zone.

Continuing early rally, the pound spiked up to 0.7861 against the euro, a 10-day high. The pound is poised to find resistance around the 0.77 mark. The pair traded at 0.7923 when it ended yesterday's deals.

Bouncing off from an early low of 184.41 against the yen, the pound climbed to a 3-day high of 185.84. Next key resistance for the pound-yen pair is likely seen around the 190.00 area. The pound-yen pair closed yesterday's trading at 184.73.

Looking ahead, U.S. weekly jobless claims for the week ended Decmber 13 are due in the New York session.