The Pound Sterling (GBP) firmed somewhat and UK yields rose in response to stronger than expected UK Retail Sales data for September, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

GBP firms modestly on USD and EUR

“Sales rose 0.3% in the month, versus expectations of a 0.4% decline. Swaps pricing for the November BoE policy decision is little changed, however, with a quarter point cut still fully reflected in the market. EUR/GBP dipped below 0.83 briefly following the data but gains have been trimmed back somewhat over the course of the European morning session.”

“GBP continues to attract support on dips—although spot losses have extended a little below the potential base that was developing earlier this week.”

“Spot has eased back from its intraday high near 1.3075 made earlier in the session but a second net daily gain today would bolster short-term chances of a more sustained push above 1.31 and perhaps push on to test firmer resistance around 1.3175/00 into next week.”