The pound advanced against its key counterparts in the early European session on Thursday, following the release of data showing better than expected UK retail sales growth in July driven by food store sales.

Data from the Office for National Statistics showed that retail sales volume grew 0.3 percent month-on-month in July, the same rate as logged in June. Sales were expected to rise at a slower pace of 0.2 percent.

Excluding auto fuel, retail sales climbed 0.5 percent after rising 0.6 percent in June. This was also faster than the expected 0.1 percent.

On a yearly basis, retail sales volume growth slowed to 1.3 percent from 2.8 percent in June. Economists had forecast 1.4 percent annual growth.

Likewise, sales excluding auto fuel, grew 1.5 percent, weaker than June's 2.8 percent increase, but better than 1.2 percent forecast.

Investors digested the Fed minutes released overnight, which showed that officials were more worried about inflation, with a fissure appear to be developing over when to raise interest rates.

The pound showed mixed performance in the Asian session. While the pound held steady against the euro and the franc, it dropped against the yen. Against the greenback, the currency rose. The pound bounced off to 141.99 against the Japanese yen, from a 6-day low of 141.51 hit at 9:30 pm ET. The pound is likely to find resistance around the 143.00 region.

Data from the Ministry of Finance showed that Japan logged a merchandise trade surplus of 418.8 billion yen in July.

That topped forecasts for a surplus of 327.1 billion yen but was down from 439.8 billion yen in June.

The pound reversed from an early more than 3-week low of 1.2405 against the Swiss franc, rebounding to 1.2455. The next possible resistance for the pound-franc pair is seen around the 1.26 area.

The pound rose back to 1.2904 against the dollar, just few pips away to pierce its early 2-day high of 1.2909. Continuation of the pound's uptrend may see it challenging resistance around the 1.30 level.

The pound edged up to 0.9094 against the euro, after having fallen to 0.9136 at 2:45 am ET. If the pound extends rise, 0.89 is likely seen as its next resistance level.

Looking ahead, the European Central Bank will release minutes from the July 19-20 monetary policy meeting at 7:30 am ET.

In the New York session, U.S. weekly jobless claims for the week ended August 12, industrial production and leading indicators for July as well as Canada manufacturing sales for June are set for release.

Dallas Fed President Robert Kaplan speaks at the "Dialogue with the Dallas Fed" event hosted by the Lubbock Chamber of Commerce in Texas at 1:00 pm ET.

Minneapolis Fed President Neel Kashkari speaks at an event hosted by the Edina Rotary Club in Minnesota at 1:45 pm ET.

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