The pound dipped slightly lower on Friday following the lower than expected retail sales figures for January.
The pound pared gains against the dollar following the data release. At 10:03 GMT, the GBP/USD was up 0.03% on the previous session close to 1.4101.
The pound reached a two week high against the weaker dollar early on Friday morning, touching 1.4145. Immediately prior to the data release at 09:30 GMT. cable was 1.4105.
According to a report by the Office for National Statistics released on Friday, UK retail sales increased by 0.1% in the three months to January.
December recorded a decline of 1.4%, revised upward from a decline of 1.5%. The consensus figure had been for an increase of 0.5%.
Year on year retail sales, though at the highest since August, were still far lower than analysts had forecast. Retail sales grew 1.6% year on year, while the forecast figure had been 2.6%. The December figure was upwardly revised to 1.5% from 1.4%.
Core retail sales, which exclude automobile sales and fuel, increased by 0.1% in January. Economists had expected a 0.6% rise. December’s reading was revised to a decline of 1.5%, up from the prior 1.6% drop.
Consumers spent more on active wear in January, however food sales fell as households tightened their belts following the festive period. With inflation cooling and wages creeping higher, the Bank of England predicts that the squeeze on consumers in 2018 will ease.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.14% at 88.35. Earlier in the session, the dollar reached three year lows.
GBP/CAD was down 0.19% to 1.7563.
Investors will be watching Brexit news over the weekend. On Friday, Philip Hammond will conclude his trip European trip, where he has met with several EU finance ministers.
Prime Minister Theresa May is set to meet German chancellor Angela Merkel in Germany. On Saturday, May will make an official Brexit speech at a conference in Munich, the second in a series of six ‘Road to Brexit’ speeches planned for the coming weeks. Boris Johnson spoke in London on Wednesday.