A weak UK confidence survey yesterday had sterling on the back foot

The pound extended its one-month low against the euro, dipping as low as 1.0925 as demand for the UK currency remained weak.

• Sterling slipped back half a percent on the day after an unexpected fall in British consumer confidence underlined ongoing weakness in the domestic economy.
  
• A monthly GfK survey showed its UK consumer confidence index fell to -17 in November from -13 in October, well below the market forecast.
  
• Analysts said overall demand for sterling may remain sluggish amid evidence which continues to show that the UK economy is struggling.
  
• There was some positive news for the markets though after the UAE central bank agreed to support the indebted Dubai banks.
  
• While analysts said that the financial issues in the hub of the Middle East may have subsided for now, some said sterling was unlikely to rise significantly in the near term as many in the market continue to bet that the UK economy will take longer to recover than other countries.
  
• In trading this morning the pair are holding steady around the overnight close price, although sterling could find slight support if the UK manufacturing PMI index, released at 09:30 shows improvement for November.