UK data surprises have not been this good since January
Coming into the retail sales release, UK economic data has not had this much feel good factor to it since January this year when you take the Citi economic surprise index as a gauge. This month alone, the trio of key data points from the UK have not only shown up but they've also beat expectations handily: wages data, inflation data, retail sales data.
While the recent releases are no doubt positive for the pound, there is still the lingering issue of Brexit. And yesterday's trading was a perfect example of that. The pound touched a high of 1.3215 against the dollar on the back of better-than-expected CPI figures but then fell to 1.3099 from 1.3180 in a matter of seconds on one negative Brexit headline.
Barring any game changing or firmed up Brexit comments on a deal/no deal, pound buyers can look towards economic data for added support in the meantime. That should help keep the pound underpinned ahead of key discussions to come in October at the EU Summit and potentially May's travails in getting her Chequers proposals through parliament voting.
However, make no mistake. Brexit, deal or no deal outcome that is, remains the number one risk factor in pound trading still.