Sterling stuck near 14-month low despite strong retail data

LONDON - 16 August 2018: Sterling languished near 14-month lows on Thursday, and strong British retail sales did little to support the currency hamstrung by fears about Britain leaving the European Union.

Hot weather and the World Cup boosted retail sales in July but the pound remained flat against the dollar around the $1.27 level.

A strong dollar and mounting fears that Britain will fail to secure an agreement before it leaves the EU in March have hurt the pound. It has shed 12 percent of its value since April and on Tuesday sank to $1.2662, its weakest since June 2017, falling against the dollar for a 12th straight day.

Few saw a Bank of England interest rate hike earlier this month as a vote of confidence in the economy, since Britain’s future, and access to European markets, remains in doubt.

“Future interest rate rises now seem a distant prospect and Brexit continues to cause uncertainty... even this good economic performance is unlikely to translate into a lasting boost for sterling,” said Lee McDarby, an executive at currency brokers Moneycorp.

Against a surging euro, the pound traded broadly flat at 89.47 pence per euro.