Sterling plumbs two-week low after weak data

Sterling fell in European trade against dollar for the second session, marking two-week lows following weak data from the UK, cutting the chances of UK rate hikes in February.

GBP/USD fell 0.3% to 1.3558, the lowest since January 10, with an intraday high at 1.3602.

Sterling lost 0.1% yesterday, the fourth loss in five days as the dollar recovers against major rivals, while the pound fell 0.8% this week, on track for the first weekly loss in five on profit-taking.

UK retail sales fell 3.7% in December, passing estimates of a 0.6% drop, which is the steepest decline since January 2021.

Retail sales constitute 70% total local GDP, and the recent drop is a dire sign on the pace of UK economic recovery.

The Bank of England won't just rely on historically high inflation rates in the UK when considering rate hikes, it will also focus on the rate of economic recovery.