The 1.8% rise is a huge surprise. The volume of sales dropped by 0.8% last month and was expected to rise by 0.4% this time.
GBP/USD is now at 1.6115, breaking earlier levels hitting levels last seen 5 months ago.
GBP/USD was moving higher before the release, reaching 1.6080 from the 1.6040 – 1.6060 range seen beforehand. Were speculations about a good figure already present? Or was it leaked? It isn’t uncommon for British figures to be leaked.
For more levels, see the GBP/USD forecast.
Earlier this week, inflation ticked up as expected and the unemployment rate surprised with a drop to 8.3%. Also jobless claims rose less than expected.
The meeting minutes had the highest impact though: the consistent dovish member, Adam Posen, finally changed his mind and didn’t support more QE in Britain. Only one member supports more pound printing, and we might see calls for a rate hike as early as May.
Where will the pound stop the current rally? 1.6125 provides resistance as well as 1.6165 last seen in at the beginning of November 2011, and the beforehand only in September.