Pound fails to capitalize on Friday's gains vs the euro

Sterling failed to capitalise on gains made on Friday as investors remained cautious of overestimating the UK’s revised GDP figure.

• Sterling inched up on Friday after figures showed that the UK economy contracted at a slightly slower rate in the second quarter than initial estimates.
  
• The 0.1% revision, although better-than-expected, had a very limited effect on the pound, with investors remaining cautious following previous weak business investment data.
  
• Analysts warned that the small improvement did not obscure the severity of the UK recession and the challenges still facing the economy.
  
• Additionally, traders were hesitant to take on significant positions in the currency ahead of the Bank Holiday.
  
• In trading yesterday, the pound held steady against the single currency to close the day marginally down at 1.1364.
  
• Sterling started to recover its losses against the euro this morning following relatively unimpressive German retail sales figures which dulled support for the currency.
  
• However, worse-than-expected data released about the UK manufacturing sector at 09:30BST has hurt the pound, which is currently trading 0.23% down for the day.