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Finance

Pound finds some footing on retail sales amid dollar rebound

Published by Global Banking and Finance Review

Posted on April 25, 2025

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LONDON (Reuters) -British retail sales data that exceeded expectations offered some support to sterling on Friday though not enough to keep it in positive territory against the dollar's mini bounce-back across the board.

The pound was last down 0.22% against the dollar at $1.3309, hoisted off its session lows by the data that showed retail sales volumes rose by 0.4% in March alone, compared to the 0.4% decline expected by a Reuters poll of economists.

For the first quarter as a whole, retail sales rose by 1.6% - the strongest reading in four years.

"Sterling has got a little bit of comfort from this. I wouldn't overstate it, but it had a decent run and was threatening to fall back and got a little bit of help from the data, temporarily at least," said Kit Juckes, chief FX strategist at Societe Generale.

The dollar was stronger against nearly all developed market currencies on Friday, helped by signs of easing trade tensions between the U.S. and major partners, including China. [FRX/]

The U.S. currency remains significantly weaker than before President Donald Trump's tariff announcements on April 2, however. Sterling, which has been roughly in the middle of the pack, is up 3.25% on the dollar in April, which would be its biggest monthly gain since November 2023.

The euro is up a chunky 5.3% on the dollar in April, and has gained nearly 2% on the pound, in what would be its biggest monthly advance since December 2022.

On Friday, the pound and euro were largely moving in tandem, with the euro last at 85.35 pence.

Traders this week have also been digesting remarks from Bank of England policymakers.

Governor Andrew Bailey said on Thursday he was focused on an expected shock to economic growth from Trump's tariffs and retaliatory measures by other countries, but did not foresee a recession in Britain.

Another BoE rate setter, Megan Greene, is due to speak later in the day. Earlier in the week, she said tariffs would put downward pressure on British inflation.

Such remarks have been supporting bets on BoE rate cuts. Markets are currently pricing two rate cuts across the BoE's next three meetings, and at least one further move by year-end.

(Reporting and writing by Alun John; editing by Mark Heinrich)