Pound Drops On Disappointing U.K. Retail Sales, Factory Activity Data

(RTTNews) - The pound weakened against its major counterparts in the European session on Friday, as weaker-than-expected U.K. retail sales data and factory activity heightened concerns about economic growth.

Preliminary data from the Office for National Statistics showed that UK retail sales declined more than expected in March.

The volume of retail sales including motor fuel decreased 0.9 percent from the previous month. Economists had forecast a 0.5 percent fall.

Excluding auto fuel, retail sales shrunk 0.6 percent on a month-on-month basis in March after a 2.1 percent gain in February.

Flash survey results from S&P Global and Chartered Institute of Procurement & Supply showed that U.K. manufacturing PMI fell to 46.6 in April from 47.9 last month. The reading was forecast to fall to 48.5.

Elsewhere, results of the monthly survey by the market research group GfK showed early Friday that the UK consumer confidence improved for a third month in a row as people were less pessimistic regarding the outlook for their own financial situation and that of the economy.

The GfK consumer confidence index for the UK climbed to -30 in April, which was the highest reading since February last year, just before the start of the war in Ukraine. Economists were looking for a score of -35.

The pound dropped to a 3-day low of 1.2376 against the dollar and a 4-day low of 0.8861 against the euro, off its early highs of 1.2446 and 0.8808, respectively. The next possible support for the pound is seen around 1.19 against the dollar and 0.90 against the euro.

The pound depreciated to a 1-week low of 165.51 against the yen and more than a 5-week low of 1.1053 against the franc, from its early highs of 167.07 and 1.1111, respectively. The pound is seen finding support around 163.00 against the yen and 1.09 against the franc.