Stronger than expected August Retail Sales (up 1.0% in headline terms versus a 0.4% rise expected) drove the pound to its highest in 2 1/2 years against the USD and the highest in 2 years against the EUR, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

GBP drives gains to test major resistance

“Swaps have pared a little more BoE easing risk for November but continue to reflect a little more than 25bps of anticipated cuts.”

“The Pound Sterling (GBP) has failed to hold early gains and movement off the intraday peak is starting to look somewhat negative on the intraday chart (via a bearish “shooting star” candle signal). Daily price action looks—potentially—similar. This may be important as I noted 1.3330 as major, longterm resistance in yesterday’s comments.”