Pound climbs vs euro as UK retail sales better than seen

London - The pound extended gains versus the euro on Thursday as UK retail sales rose more than forecast in July.

Sterling snapped a five-day decline versus the common currency after data from the statistics office showed demand for food spurred the volume of goods sold by 0.3%, compared with the median prediction for a 0.2% increase.

The retail sales numbers come a day after data showed that UK’s unemployment rate dropped to the lowest since 1975 and wages rose more than forecast.

“It was again some good news for sterling,” said Georgette Boele, a currency strategist at ABN Amro Bank in Amsterdam.

“The labour-market report yesterday and today’s retail sales both came in above expectations. We think that the euro across the board has risen a bit too fast and some kind of correction is on the cards, also versus the pound.

So we expect EUR/GBP the grind lower if there is some profit taking in the euro.”

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