Sterling slipped to two-week lows against the euro on Thursday as a sovereign account bought the common currency for month-end requirements, while the pound eased against the dollar as stock markets in Europe and the US traded in negative territory.
The pound was little moved by a weak CBI survey that showed British retail sales fell at their fastest pace in over a year, underlining the fragility of the UK recovery. "The CBI survey was pretty close to expectations which is why we did not have too much of a reaction on sterling," said Adrian Schmidt, FX strategist at Lloyds TSB. "We heard some sovereign buyers in the euro/sterling cross which probably drove the euro higher."
The euro was up 0.2 percent at 88.20 pence, after rising to 88.35 in earlier trade, its highest since August 10. Dealers cited downside stop-losses at 87.95 pence. Markets believe Bernanke may use the speech to signal further monetary stimulus to prop up the US economy. Sterling was down 0.3 percent for the day against the dollar at $1.6327, off its early European session highs of $1.6397. Traders said weakness in European and US stocks put some pressure on the pound in afternoon dealing
Near-term support was at the 100-day moving average at $1.6294. Resistance was around $1.6480 - a high struck on August 16. Sterling has been boosted recently against the dollar, soaring to a 3-1/2 month high of $1.6618 last week on merger and acquisition flows and a rise in foreign investment.
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