British Pound Rallies on Strong Retail Sales

The British pound continued to lose ground against the Euro but rallied back above 2.0 against the US dollar today.

Retail sales, monetary supply and mortgage approvals were hot, which offset the criticism Bank of England Governor King faced as he explained the central bank’s reaction to the problems at Northern Rock to a committee of MPs. Today’s UK data indicates that the economy is still holding steady, but that will not stop the Bank of England from being less hawkish since inflation remains below their target. Meanwhile the UK continues to benefit from merger and acquisition flow. Qatar Investment Authority and Borse Dubai have snapped up 48 percent of the London Stock Exchange.

Written by Kathy Lien, Chief Currency Strategist of DailyFX.com