Aussie makes solid gains vs. sterling

The Australian dollar made solid gains against sterling yesterday, as doubts arose over the UK's economic recovery.

• UK retail sales data surprised markets by falling 0.6 percent in May, against a forecast gain of 0.4 percent.
  
• Other news also showed that Britain’s public finances deteriorated more than expected last month, while lending to British businesses fell by the largest amount in 9 years.
  
• This data has illustrated that there is still a large gap between recent investor optimism and economic fundamentals.
  
• This suggests that any economic recovery is going to be fragile and likely to be stuttering, with economic confidence and optimism likely to continue to ebb and flow on either positive or negative data.