The British pound staged a strong recovery today on the heels of a much healthier expected retail sales report, erasing nearly all of its past week losses.
Consumer spending snapped back in the month of January, rising by 0.8, which was the fastest pace of growth since February 2007. Although the Bank of England is worried about a slowdown in the coming months, the strength of the labor market and discounting by retailers last month have helped to fuel consumer spending. This unambiguously positive news has helped the British pound carve out a near term bottom, but it will not stop the Bank of England from looking to lower interest rates again next month.