Sterling ticked higher against the euro on Tuesday, supported by robust British data and by news that British airports operator BAA Plc had agreed to a $19 billion-pound take-over bid.
However, sterling weakened against a rallying dollar, after St. Louis Federal Reserve President William Poole was quoted as saying it was safer to err on the side of "going a little too far" on raising interest rates to lower inflation expectations.
Data from the British Retail Consortium overnight showed retail sales grew strongly in May, while the Society for Motor Manufacturers reported that car registrations posted their first year-on-year increase since the start of the year in May.
"News from the UK continues to improve and the BRC survey is indicative of a recovery in the consumer sector," said Steve Barrow, currency strategist at Bear Stearns. "I think we are possibly getting to the end of this uptrend in euro/sterling."
By 1403 GMT, sterling was 0.1 percent firmer on the day against the euro at 68.84 pence, having recovered from Monday's one-month low at 69.03 pence. Against the dollar, it was down half a percent at $1.8634 as Poole's comments fuelled expectations of a US rate hike later this month.
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