Pound Jumps Above $1.3330 as UK Retail Sales Smash Forecasts

Traders read the print as another argument against near-term Bank of England rate cuts. Money markets trimmed the probability of a November quarter-point reduction to roughly 55%, from about 70% before the data, according to swaps pricing. "The consumer isn't buckling yet, and that takes the edge off any urgency to cut," a London-based rates trader said.

The report follows a string of UK data that has come in on the firm side of expectations, including GDP and services PMI readings. That pattern has helped the pound hold its ground even as the dollar has strengthened broadly on hawkish Federal Reserve positioning.

Sterling's next test comes with Wednesday's CPI print for August. A hot number would further push back BOE easing bets and could extend the pound's run toward $1.3400. A soft reading would revive speculation that the economy is cooling faster than the BOE's last projections assumed.