• The Pound Sterling exhibits sheer strength against the US Dollar on multiple tailwinds.
• Healthy growth in UK Retail Sales could diminish bets of a second straight BoE interest-rate cut.
• The US Dollar struggles to hold onto Thursday's recovery, which was driven by upbeat economic data.

The Pound Sterling (GBP) outperforms its major peers, except Asia-Pacific currencies, in Friday’s London session. The British currency gains significantly as the United Kingdom (UK) Office for National Statistics (ONS) has reported that Retail Sales rebounded in July, as expected, after contracting sharply in June.

The report showed that monthly and annual Retail Sales rose by 0.5% and 1.4%, respectively. As per the report, sales receipts at department stores and sports equipment stores grew strongly, with retailers suggesting that summer discounting and sporting events such as the European Football Championship boosted sales. On the contrary, demand for automotive fuel contracted sharply.

Retail Sales are a key measure of consumer spending. Strong demand from consumers tends to fuel inflationary pressures in the economy, so the data could dampen expectations that the Bank of England (BoE) will opt for another interest-rate cut in September. The BoE started reducing its key borrowing rates in the first week of August, but the rate-cut move was a tough call, with a 5-4 vote split.