Investing.com - Sterling pared Wednesday’s GDP related gains on Thursday as markets adjusted ahead of the European Central Bank meeting in Frankfurt.
The pound ended the previous session up 1% after GDP data uptick was seen as raising the chances of an interest rate hike by the Bank of England next week.
Cable dropped to 1.3188 on Thursday morning before lifting back above the 1.3200 level. At 11.00 GMT, GBP/USD was 1.3219, a drop of 0.34% on the previous session close.
The pound slipped against most major currencies following the release of retail sales figures for the year to October showing the sharpest decline since 2009, the height of the financial crisis in the UK.
The Confederation of British Industry released its monthly Distributive Trades Survey on Thursday, showing steeper inflation was beginning to bite the British consumer.
Retails sales balance figures from the CBI decreased to -36 in the year to October, a significant drop from September’s reading of +42.
Rain Newton-Smith, CBI Chief Economist commented on the survey results: “It’s clear retailers are beginning to really feel the pinch from higher inflation. While retail sales can be volatile from month to month, the steep drop in sales in October echoes other recent data pointing to a marked softening in consumer demand.”
The US dollar index, a measure of the greenback’s strength against a trade-weighted basket of 6 currency majors was steady at 93.58.
The single currency was steady ahead of the European Central Bank meeting in Frankfurt. It is expected that the ECB will announce details regarding scaling back the Asset Purchase Programme. It is not expected that the ECB will increase interest rates.
EUR/GBP rose 0.33% to 0.8937, while EUR/USD was almost unchanged at 1.1813.
The pound was down against safe haven yen and Swiss franc. GBP/JPY dropped 0.42% to 150.20. GBP/CHF dipped 0.23% to 1.3096.
Sterling also struggled against the commodity currencies. GBP/NZD was 1.9225, down 0.13%, with GBP/AUD down 0.48% to 1.7134.
GBP/CAD dropped 0.32% to 1.6912.
Investors will be watching the euro during the ECB press conference.