Sterling gained around half a percent against the dollar this morning, tracking broader moves in major currencies after some caution about the underlying strength of the U.S. economy set in following a high January inflation number.
The pound – down by around a fifth in just over a year against the dollar – has been stuck in a 3-cent range for a month absent dramatic developments in the government’s move towards launching Brexit talks next month.
There have been negative signs from a handful of economic data, with wages numbers on Wednesday dipping below forecasts, but so far not enough to provoke another more aggressive round of pound selling.
The market is clearly taking a breather before the next round of Brexit news.
Retail sales numbers due on Friday will provide the next clue to the broader strength of the UK economy, which has proved consistently more robust than expected in the face of Brexit nerves since last June.
Sales growth is expected at 3.4 percent year on year in January.