During the European session, traders paid close attention to the British pound. The GBP/USD pair approached the level of 1.34 ahead of key macroeconomic reports. The latest data showed that the retail sales in the United Kingdom rose at a faster pace. The Office for National Statistics reported that the retail sales expanded by 1.6% in April after falling by 1.1%. In annual terms the reading increased from 1.3% to 1.4%. Additionally, the core retail sales excluding fuel cost rose by 1.3% versus the previous decrease of 0.5%. Importantly, this result is a sign of strong consumer confidence despite the uncertainty over the Brexit. This factor may also change the Bank of England's attitude towards the interest rates.
Bank's officials have repeatedly said that consequences of the divorce proceedings of the EU and the UK may influence the British economy. At the last meeting the Bank of England said that it stands ready to tighten its monetary policy in August. However, the previous macroeconomic data, particularly the inflation report, created some uncertainty. Today, market participants hoped to hear some hints on the future monetary policy from Mark Carney, who participated at the Market Forums 2018, organized by the Bank of England. However, their expectations were not met. Mr. Carney will have a chance to influence the dynamics of the national currency as later in the day he will deliver speech at an annual event held by the society of professional economists.