Quite a beat in UK retail sales: a rise of 1.6% m/m or 6.4% y/y. for the month of November. This comes on top of upward revisions for October. Core retail sales rose 1.7% m/m and 6.9% y/y. These numbers are much better than expected. Christmas shopping has certainly begun in the UK.
GBP/USD was already moving higher and now extending its gains. It seems that some market participants had some kind of idea about the figures.
The UK was expected to report a rise of 0.3% in November, after rising a strong 0.8% in October. Year over year retail sales were predicted to rise 4.4%. Core sales carried predictions for a rise of 0.3% and 4.5% year over year.
GBP/USD began moving up before the publication, climbing up to 1.5630 from the post-FOMC lows.
Janet Yellen made some hawkish remarks yesterday, sounding optimistic about the job market and dismissing the lower inflation expectations. While the Fed statement did not change much in the language, her hawkishness ignited a dollar rally.
For more, see the GBPUSD forecast.