Pound pushes up against the euro, spurred by positive sales figures

Sterling pushed back over 1.10 in trading yesterday as data revealed a pick-up in UK realised sales dulling concerns over the health of the British economy.

  • The pound continued to recover last week’s losses as the UK CBI realised sales index revealed a significant monthly increase in sales volumes, beating market forecasts.
  • Conversely data also showed that lending to the eurozone’s private sector declined in September compared with the same period a year earlier, highlighting notable constraints on financing to companies and households that could damage the region’s economic recovery.
  • Private-sector lending decreased 0.3% in September, after rising by an annual rate of 0.1% in August, data from the ECB revealed.
  • In addition, traders noted good demand for sterling from longer term investors and Asian reserve managers who were keen to sell the dollar following the US currency’s sharp gains in the previous session.
  • However, the pound remains range bound, slipping back marginally this morning, as investors remain cautious after MPC member Adam Posen in his speech on Monday evening reminded market players that UK officials may maintain stimulus programs in order to cement the recovery.