Sterling Sinks Despite Booming UK Economy

Britain's economy has had its best week of data since spring, but it hasn't helped the British Pound Sterling. In fact, the currency is now at a four-week low against the US Dollar after a series of strong economic reports.

Retail sales rose 1% in June, beating expectations, while consumer confidence climbed to a six-month high in July. Business activity surveys also showed the private sector back into expansion ahead of forecasts.

However, these positive data points were not enough to boost the Pound Sterling. In fact, they became a reason to sell as investors took profits from holding the currency.

The Bank of England's decision on Thursday will be a key event for the currency, with a full Monetary Policy Report and press conference expected. Consensus looks for no interest rate change, but the forecast is where the trouble lies, as reports are conditioned on an average of market prices taken before publication, not current prices.