British Pound Sterling

The pound to euro is unchanged on the day at 1.2763. The exchange rate had touched north of 1.28 earlier in the session but it seems that a recent spike in euro strength has hampered this pair.

Read our report on the behaviour of the EUR/USD.

Nevertheless, the pound sterling has been the talk of the town today.

"The highlight on the wires was a better than expected UK retail sales print, which helped lift the GBP to the top performance spot of the G10 currencies," says Shaun Osborne at TD Securities.

Retail sales volumes rose 0.3 pct between June and July, ahead of consensus forecasts of a 0.1 pct fall.

And to give sterling that extra little boost the ONS said revised June data showed a 0.8 pct monthly rise as opposed to an initially reported 0.1 pct.

"While the retail sales number is not included in the output measure of gross domestic product, the better than expected sales growth in June adds to the view that the GDP numbers overstate the recent weakness of the economy," said Chris Williamson, an economist at Markit, a data provider.

Economic releases are becoming increasingly important for sterling as analysts try and second guess the Bank of England.

Whether the Bank expands their asset purchase programme further at the end of the year will be critical for sterling.

Should we see signs that the economy is improving as we head through the remainder of the year, then the less likely the Bank will act, thus boosting sterling.

George Buckley, Deutsche Bank says:

"I think the news is better - it's not as weak as expected and we've got a big backward revision. I think it supports what the Bank of England's been saying that as real incomes start to improve because of lower inflation and possibly eventually higher wages, you might start to see the retail sector show some signs of improvement, because consumption has been the worst performer in the G7.

"The number in July is not that much different from what was expected. What's more interesting is the revision upwards of the back data, which means you're now looking at much stronger growth in June."

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