Pound drops as retail sales unexpectedly fall

London - The pound dropped by the most in more than two weeks as a report showed retail sales unexpectedly fell for a third month in January.

The decline left the currency poised to close below its 55-day moving average versus the dollar for first time in almost a month.

Retail sales dropped 0.3%, following a 2.1% plunge in December, the Office for National Statistics said on Friday, confounding market expectations for a 1% increase.

UK government bonds climbed after the report, leading a rally in global core securities.

The pound dropped 0.7% to $1.2398 as of 12:19. The 55-day moving average is at $1.2425 The pound may find support at $1.2383, the February 15 low, and $1.2346, the 50% retreat of the move between January 16 to February 2 The yield on UK 10-year gilts fell five basis points to 1.21%.

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