Sterling maintained a solid tone against the dollar ahead of the US open on Thursday, but continued to hit resistance above the 1.2500 level. The Euro regained the 0.8500 level which helped underpin confidence with a further advance to the 0.8550 area as Sterling overall lost support with markets still wary over the risk of further medium-term losses. A slightly more defensive attitude surrounding risk appetite curbed Sterling support, although underlying selling interest above 1.2500 against the dollar was the more important factor.
Sources suggested that the government was looking to trigger Article 50 around the time of the March 9-10 EU Summit and the Brexit debate will sharpen again next week when parliament returns from recess. The latest retail sales data is due on Friday and another weak release would maintain expectations that there will be an underlying slowdown in spending as Sterling consolidated around 1.2500 against the dollar.