Sterling’s progress was far from directionless last week. It covered its two cent range – or at least most of it – six times. But it did not go anywhere.

In the CFDs market Sterling opened in London yesterday morning within a quarter cent of last Monday’s departure point.

Thursday morning’s positive performance was more clearly founded. Public sector net borrowing in July was £3.2 billion, two billion lower than forecast and less than a quarter of the previous months shortfall. Retail sales rose by 1.1% in the month instead of the 0.4% analysts had predicted. But the euphoria evaporated quickly after The United States delivered another set of duff data. Sterling had to give back in the afternoon what it had won in the morning.

The US data included very little to reassure investors over their recently-reawakened fears of double-dip global recession. A tolerable start on Monday saw the New York Federal Reserve’s manufacturing index improve by one point to 7.1 but it was a lousy finish on Friday when their colleagues in Philadelphia reported a 13-point drop to -7.7, signifying falling activity.

Residential real estate remains a problem area. Housing starts were steady in July but building permits were down again. The National Association of Homebuilders reflected the problem in their housing market index. It went down to a measly 13, the lowest level since March last year despite the NAHB having spent $600k on lobbying in the second quarter of the year.

Perhaps the most disappointing figure was the half million new claims for jobless benefit the week before last. The number was not a lot higher than the previous week’s 488k claims but the big round number was psychologically painful.

The only really dollar-positive factor was the weaker tone of economic statistics from around the world, including the United States. Investors worry that the global recovery might not have the horsepower to pull away from the black hole of recession.

For every good number here they can see a bad one there. In such a mood they are less likely to embrace risk, more likely to seek the security of a safe-haven currency such as the Japanese yen (last week’s best performer) or the US dollar.

In the financial spread betting market a week ago the pound was caught in a two-cent range, hemmed in by technical resistance to the upside and technical support to the south. Nothing has changed.

Although that support has turned out to be more robust than it originally seemed, until sterling either rebounds from or sinks through that level its future direction can be no more than a guess.

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