The pound continues its rally against a broadly weaker aussie

Sterling edged up against the aussie yesterday, benefiting from improved UK sales data, which supported claims that the UK economy is recovering.

• On Monday evening, MPC member Adam Posen, following negative GDP data, stated that there were still signs of an economic recovery even if Britain is behind other countries in pulling out of the recession.
  
• His statement found support yesterday after the UK CBI sales showed month-on-month improvement, beating market expectations and buoying demand for the UK currency.
  
• The UK currency has pushed higher in trading this morning after investors pared bets of a steep rate rise in Australia after inflation data did not increase by as much as some had anticipated.
  
• The quarterly CPI figure came in at 1.0%, which tilted the markets away from pricing in a more aggressive upward rate movement at the next RBA meeting on Nov 3 rd.
  
• Currently the pair are trading around the 1.80 level, just below a three-week high for the pound.