Sterling slides against the Dollar as investors take precaution with risky asset

Sterling fell on Tuesday, retreating from earlier gains against the greenback as Britain's main stock index turned negative and data showed UK retail sales fell faster than expected in July. The British Pound, which often tracks UK equities, stumbled to the day's low after the FTSE 100 Index of leading shares fell nearly 1 percent on the day at one point. Adarsh Sinha, a currency analyst at Barclays Capital, said sterling slipped in line with equities but was more generally struggling to keep in step with gains in other pro-cyclical units following a strong performance earlier in the summer. "Sterling has sort of been underperforming the other more risky currencies in general," he said. "What really matters for sterling per se is what happens in banking stocks." The GBP/USD is currently trading at $1.6370 as of 8:49am, London Time.

Canada’s dollar was little changed against its U.S. counterpart, after rising for seven straight days, as stocks and crude oil declined and traders speculated recent gains in the currency may have outpaced economic growth. The Canadian currency, nicknamed the loonie, tumbled after a report showed U.S. consumer confidence dropped in July more than economists forecast. Canada’s statistics agency is due to issue June data on industrial production and raw materials prices on July 30. The next day it reports on gross domestic product for May. The USD/CAD is currently trading at 1.0850 as of 9:03am, London Time.

Orders for U.S. durable goods probably fell in June for the first time in three months, reflecting auto-plant shutdowns, economists said before a report today. Bookings for goods meant to last several years dropped 0.6 percent after rising 1.8 percent in May, according to the median estimate of 72 economists surveyed by Bloomberg News. Excluding transportation equipment, orders were probably unchanged after also rising the prior month. “The pace of decline appears to have slowed significantly, and final demand and production have shown tentative signs of stabilization,” Federal Reserve Chairman Ben Bernanke told Congress last week.

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