Pound Advances As U.K. Retail Sales Improve

The pound drifted higher against the other major currencies in European deals on Thursday, after data showed that U.K. retail sales rose more-than-forecast in April, raising hopes that Britain's economic growth may accelerate in the second quarter.

Data from the Office for National Statistics showed that the volume of retail sales including auto fuel expanded 1.2 percent month-on-month reversing a 0.7 percent fall in March. Sales were expected to grow 0.4 percent.

Likewise, excluding auto fuel, sales increased 1.2 percent after staying flat in March. Economists had forecast a 0.2 percent rise for April.

Including auto fuel, retail sales growth accelerated to 4.7 percent on a yearly basis in April from 4 percent in March and exceeded a 3.7 percent rise forecast by economists.

Retail sales excluding auto fuel also grew 4.7 percent, but slightly slower than the 4.8 percent increase seen in March. Sales were expected to rise only by 3.7 percent.

The U.K. stock market also rose, as miners gained after the release of Chinese manufacturing data. The FTSE 100 index rose 0.10 percent or 7.2 points to 7,015.

Investors look forward to a 2-day EU summit in Riga, where Greek Prime Minister Alexis Tsipras is scheduled to hold talks with German Chancellor Angela Merkel and French President François Hollande, in an attempt to find a solution to secure bailout aid.

The pound was trading mixed in the Asian session. While the pound held steady against the greenback and the yen, it declined against the franc. Against the euro, it rose.

The pound spiked up to 1.4613 against the Swiss franc, its strongest since April 29, from an early low of 1.4519. The pound is seen finding resistance around the 1.50 mark. At yesterday's close, the pair was worth 1.4554.

The pound rose to a 2-day high of 1.5663 versus the dollar, while approaching 189.46 versus the yen, its highest level since December 8. The next likely resistance for the pound may be located around 1.58 against the greenback and 192.00 against the yen.

The pound advanced to a new 2-month high of 0.7114 against the euro, up from a low of 0.7166 hit 3:45 am ET. On the upside, 0.70 is seen as the next possible resistance for the pound. The pair was trading at 0.7138 at yesterday's close.

The flash data from Markit showed that the Eurozone economy lost growth momentum for a second successive month in May.

The composite Purchasing Managers' Index dropped to 53.4 in May from 53.9 in April. The reading was expected to remain unchanged at 53.9.

Looking ahead, the European Central Bank's account of the monetary policy meeting of the Governing Council held on April 14 and 15 is due shortly.

The U.S. weekly jobless claims for the week ended May 16, existing home sales and leading indicators for April, Markit's preliminary manufacturing PMI for May and Eurozone flash consumer sentiment index for May are set for release in the New York session.