Pound Defies Retail Sales Miss, Holds Firm Against Softening Dollar

The British pound defied weakening US economic data and disappointing UK retail sales to hold its ground against the dollar on Friday.

UK retail sales fell 0.8% month-on-month in December, worse than the expected 0.4% decline, but sterling's resilience can be attributed to several factors.

The pound's stability came despite softer US economic data and repositioning ahead of next week's Federal Reserve policy meeting, which saw the dollar index slip 0.2%.

Economists at ING noted that the retail sales miss is unlikely to change the Bank of England's near-term policy path, with the central bank focused on services inflation and wage growth rather than high-street spending.