Pound Pauses For Breath Ahead Of Retail Sales Data

The pound is steady, if you can call $1.6320 steady, ahead of retail sales data due at 9.30am BST.

U.K. retail sales are expected to have declined by 0.7% as the credit crisis and a looming recession has caused consumers to curb spending which could weigh on the Pound.

Britons may continue to retrench as BoE Governor Mervyn King confirmed that the economy was indeed in a recession. That announcement sunk the pound, which started the week looking to test $1.75, and evidence of declining growth will only add to the pessimistic outlook.

Historically a dour consumer spending report of this magnitude would present significant event risk for the Pound, but Governor King’s statements may have diluted its impact.

The dollar is steady after The Wall Street Journal reported the U.S. may spend $40 billion, by using part of the government's $700 billion financial-rescue fund, to prevent more home foreclosures.