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Forex traders might be pleased to see sterling make gains versus the single currency, which came after credit rating agency Moody's pointed out it might downgrade Spain's debt, Reuters reports.
The euro was down 0.13 per cent to stand at 84.66 pence, but this could reduce even further to around the 84 pence mark, if the Confederation of British Industry reveals strong UK retail sales growth in a survey set to be released this morning, according to analysts.
Jeremy Stretch, head of currency strategy at CIBC, described the consumer sector as holding up "pretty well", possibly because people are buying more before the VAT rises from 17.5 per cent to 20 per cent in January.
He added: "And if consumption is holding up pretty well, then it provides a fairly positive backdrop for GDP in the fourth quarter."
Posted by Chris Weaver
