Lack of Confidence Hampering Sterling
The Pound dipped following the weaker than expected retail sales and the feeling that economic recovery could slow. Government borrowing figures had little impact, although there was some relief that borrowing had shrunk. Sterling dipped close to 1.3600 against the Dollar and the Euro weakened from highs below 1.1655.
UK business confidence data will be watched closely today for further evidence on the economic recovery trends and risk appetite will also be crucial. The firmer tone underpinned the UK currency as it secured a limited advance to 1.3650 against the dollar, but wider support was limited and the Euro retreated only slightly from 4-week highs.