"December's strong retail sales performance provides a major boost to hopes that GDP growth in the fourth quarter of 2013 remained up around the 0.8% quarter-on-quarter rate achieved in both the third and second quarters"
- Howard Archer of IHS Global Insight
Are you still not tired from upbeat data from the U.K.? It is getting easy to predict Sterling's behaviour, as British currency constantly benefits from positive fundamental data from the country. Last Friday was not an exception, with the cable soaring more than 100 pips on the back of stronger-than-expected retail sales. The pair reached 1.6458 and penetrated strong resistance at 1.6351. Moreover, the pair is no longer trading in boundaries of a descending triangle.
The main reason for such a remarkable performance is a report from the ONS that showed sales at British retailers gained 2.6% in December on the back of stronger demand during the key Christmas season. This is the highest monthly gain since record began in 1996. Moreover, the figure is stronger than the consensus forecast of 2.2%. During the fourth quarter, sales soared 3.2% compared with the same period a year earlier, and this is the highest rise since October 2007.
Despite improved economic activity, a spectacular rise in retail sales came as surprise to many analysts, as several surveys showed retailers and consumers were not looking that strong. Nevertheless, a stronger-than-expected report from retailers is sending promising signs, suggesting fourth quarter's GDP can beat forecasts as well.
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