Sterling muscles past 1.35 against dollar for second session

Sterling rose against the dollar in American trade following an array of data from Britain and the US, while the Federal Open Market Committee's policy meeting draws to an end in Washington. 

As of 03:48 GMT, GBP/USD rose 0.48% to 1.3568 from the opening of 1.3503, with an intraday high at 1.36.07, and a low at 1.3496. 

Earlier UK data showed retail sales accelerated to 1.0% in August from July's 0.6%, revised higher from 0.3%, while analysts expected a 0.2% increase, and on a yearly basis, sales rallied 2.8%, compared to 1.7% in July, as analysts expected a 1.4% increase. 

Core retail sales accelerated as well to 1.0% m/m, beating forecasts, while increasing 2.4% on a yearly basis. 

In his Washington speech earlier this week, Carney asserted again that policy tightening could be required in the next few months, noting that the monetary policy could be altered on par with the possibilities of increasing interest rates back to their normal levels, noting that Brexit is expected to leave inflationary side effects. 

Carney said that rate hikes will be limited and gradual, adding that a drop in the immigration rate could raise the inflation rate in the short term, while having little impact in the long term. 

Otherwise, earlier US data showed existing home sales slid 1.7% in August to an annualized 5.35 million units, compared to July's 1.3% drop to 5.44M, while analysts expected a 0.2% increase to 5.46M. 

Investors look forward to policy decisions by Federal Open Market Committee members in this week's periodic meeting, at which policymakers are expected to unveil their three-year forecasts for inflation, growth, unemployment, and interest rates. 

Fed policymakers are expected to start the process of trimming down the Federal Reserve's $4.2 trillion holdings of treasury bonds and mortgage-backed securities, while maintaining overnight interest rates at between 1% and 1.25%.