The pound declined against its major counterparts in the early European session on Friday, after data showed that U.K. retail sales declined more than expected in December on non-food store sales.

Data from the Office for National Statistics showed that retail sales volume including auto fuel fell 1.9 percent from November following a marginal 0.1 percent drop in November.

This was bigger than the expected 0.1 percent drop and marked the second consecutive fall in sales.

Excluding auto fuel, retail sales decreased 2 percent, the first drop in three months, after rising 0.2 percent in November. Economists had forecast a 0.4 percent fall for December.

European stocks are trading mixed, with investors adopting a wait and watch approach ahead of U.S. President-elect Donald Trump's inauguration speech in Washington.

Trump's inaugural address as the 45th president of the United States will be closely watched by market participants around the world for clues about his pro-growth policy proposals.

The pound held steady against its major rivals in the Asian session, with the exception of the greenback.

The pound declined to 0.8667 against the euro, off its early high of 0.8628. The next possible support for the pound may be found around the 0.88 mark.

Data from Destatis showed that Germany's producer prices increased at the fastest pace in almost four years in December.

Producer prices rose 1 percent year-on-year in December as expected, the fastest since January 2013, when prices climbed 1.5 percent.

The pound retreated to 141.25 against the yen and 1.2290 against the greenback, from its previous high of 142.07 and a 2-day high of 1.2372,respectively. On the downside, the pound may target support around 140.00 versus the yen and 1.21 against the greenback.

Pulling away from an early high of 1.2430 against the Swiss franc, the pound edged down to 1.2371. If the pound extends slide, 1.22 is possibly seen as its next support level.

Looking ahead, Canada CPI data for December, retail sales data for November and U.S. Baker Hughes rig count data are set to be published in the New York session.

At 9:00 am ET, Federal Reserve Bank of Philadelphia President Patrick Harker is expected to speak about the economic outlook, in New Jersey.

Later in the day, US President-Elect Donald Trump is expected to speak at the 58th Presidential Inauguration in Washington DC.

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