Sterling falls off 1-1/2 year peak against dollar

Sterling bounced off the highest since June 24, 2016 against the dollar, snapping the longest winning streak in two months while still heading for the fifth weekly profit in a row, following a basket of data from Britain and the US. 

As of 05:00 GMT, GBP/USD fell 0.30% to 1.3853 from the opening of 1.3894, with an intraday low at 1.3839, and a 1-1/2 year high at 1.3945. 

Earlier UK data showed retail sales fell 1.5% m/m in December, compared to a 1% rise in November, revised from 1.1%, while analysts expected a 0.8% drop, and on a yearly basis, sales slowed down to 1.4% from 1.5%, missing expectations of a 2.6% growth. 

Core sales, excluding vehicles, fell 1.6% in December, compared to a 1.1% rise in November, while analysts expected a 1.0% decline, and on a yearly basis, sales slowed down to 1.3% from 1.5%, missing expectations of a 2.6% rise. 

From the US, The University of Michigan released its Consumer Sentiment survey for January, showing a dip to 94.4 from December's 95.9, missing expectations of 97.0. 

The economic conditions gauge in the same survey fell as well to 109.2 from 113.8 in December, while economic expectations rose to 84.8 from 84.3. One-year inflation outlook rose to 2.8% from 2.7%, while five-year outlook rose to 2.5% from 2.4%. 

Now investors look forward to a voting session in the Senate on a bill to temporarily fund the government by the Republican Party to avoid a shutdown, after the House of Representatives passed it by a 230-197 margin.