The British currency dropped lower against the U.S. dollar on Thursday, as the
greenback regained some strength after weakening in the previous session
due to downbeat U.S. retail sales data.
GBP/USD hit 1.5201 during European morning trade, the session low; the pair subsequently consolidated at 1.5187, shedding 0.31%. The pair was likely to find support at 1.5074, the low of January 13 and resistance at 1.5337, the high of January 5. The greenback strengthened after a yesterday's steep fall caused by a report showed the largest drop in U.S. retail sales in 11 months in December. Official data showed that U.S. retail sales fell 0.9% last month after rising 0.4% in November.
Sterling was higher against the euro, with EUR/GBP declining 0.43% to 0.7704.
The single currency remained under heavy selling pressure after an interim ruling by the European Court of Justice on Wednesday was seen as clearing the way for the European Central Bank to implement quantitative easing measures at its upcoming meeting on January 22. The advocate general of the European Court of Justice, Pedro Cruz Villalon, advised judges to approve the ECB's Outright Monetary Transactions program, a measure which was launched in 2012.
Sentiment on the pound remained vulnerable after data on Tuesday showed that the annual rate of consumer inflation in the U.K. slowed to 0.5% last month from 1.0% in November. Analysts had expected a smaller decline to 0.7%.
Consumer prices were unchanged from a month earlier, compared to expectations for an uptick of 0.1%. This underlined expectations that the Bank of England will keep interest rates on hold at record lows for most of this year.
