The British pound has faced some increased selling pressure after the release of a dismal CBI distributive trades report. Sterling is trading just about 40-pips off its three-month high reached earlier. The survey showed a negative balance of -3, which was far worse than the forecast for a +15. The data supports the view that consumers continue to be weighed down by higher taxes, unemployment and higher price pressures.

Euro

The euro temporarily spent some time above the initial resistance level of 1.2557 before falling back. The push higher was inspired by slightly better than expected PMI surveys that came on the heels of a dovish set of FOMC minutes. The euro’s momentum higher was squelched by comments from the German Finance Minister, who said in reference to ’s request for more time to meet budget expectations, that ‘more time was not a solution.’

US dollar

Broader market enthusiasm over more Quantitative Easing by the Federal Reserve seems to be tempering as well. Equity markets which shot higher earlier on have given back most of their gains and are only ‘just’ trading in positive territory. Government bond yields or borrowing costs for countries such as and have ticked higher. This will also weigh on the euro, but, should US data due out fail to meet expectations and support the Fed’s case for more stimulus, another dollar dip might be in the works.