Investing.com - The pound pared gains against the dollar on Thursday after hitting three-week highs earlier in the session following data showing a larger-than-forecast increase in U.K. retail sales.
GBP/USD pulled away from 1.5210, the pair's highest since February 28, to hit 1.5158 during European afternoon trade, still up 0.40%.
The pair was likely to find support at 1.5087, the session low and resistance at 1.5272, the high of February 21.
The pound strengthened against the dollar and the euro after official data showed that U.K. retail sales rose at the fastest pace since March 2012 last month, climbing 2.1%, outstripping expectations for a 0.5% increase.
Retail sales rose 2.6% year-on-year, easily surpassing expectations for a 0.5% increase.
A separate report showed that U.K. public sector borrowing came to GBP2.8 billion in February, GBP9.0 billion lower than the same month last year, when net borrowing was GBP11.8 billion.
The pound found support after the Federal Reserve said Wednesday that it will leave monetary policy unchanged despite recent signs that the U.S. recovery is gaining traction.
Market sentiment was also buoyed by data showing that China's HSBC manufacturing PMI rose to 51.7 in March from 50.4 in February, indicating that the recovery in the world's second largest economy is still on track.
Elsewhere, the European Central Bank announced that it will continue to supply emergency funding to Cyprus's banks until next Monday.
The ECB said that further funding would only be considered if an agreement with the European Union and the International Monetary Fund on a bailout is in place.
Sterling was close to six-week highs against the euro, with EUR/GBP down 0.60% to 0.8512.
In the U.S., the Department of Labor said the number of people who filed for unemployment assistance last week rose by 2,000 to a seasonally adjusted 336,000, compared to expectations for an increase of 8,000 to 342,000.
The U.S. was to release data on existing home sales and manufacturing activity in Philadelphia later in the trading day.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
