* Graphic: sterling and gilt yields bit.ly/2dgAXn1
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
* Graphic: Trade-weighted sterling since Brexit vote tmsnrt.rs/2hwV9Hv
By Patrick Graham
LONDON, Feb 9 Sterling traded at its highest in
a week on Thursday after some more upbeat British housing data
helped soothe nerves over economic growth and the government
eased past parliamentary roadblocks to its plan to trigger talks
on leaving the EU next month.
The pound has been rocked by a handful of weaker signals on
the economy over the past week, hinting that consumers are
finally beginning to feel the pain generated by an almost 20
percent fall in the currency that should push domestic prices
Data earlier this week also showed the first falls in house
prices since last June's Brexit vote. The price index run by the
Royal Institution of Chartered Surveyors (RICS), however, bucked
expectations for a further modest loss of pace.
"Sterling won't come under much pressure until we see
clearer signs of the effect of falling real wages on consumer
spending," said Societe Generale analyst Kit Juckes.
"This morning's RICS house price data are a bit above
expectations, and the next significant data come from tomorrow's
trade and manufacturing production."
The pound gained just over 0.1 percent in morning trade in
London to stand at $1.2563, having reached as high as $1.2572.
It was also 0.2 percent stronger at 85.16 pence per euro
The UK economy surprised investors last year when it
outpaced its peers among the world's big rich nations, driven by
the spending of households who shrugged off the vote to leave
the European Union.
But the results of a regular Bank of England survey on
Wednesday showed British employers plan to offer the least
generous pay deals since 2012 this year.
A number of major banks are still calling for the pound to
fall by up to another 10 percent in the months ahead as the
Brexit process develops, but it has resisted any push below
$1.20 since the start of November.
"It has been a really messy 10 days," said a dealer with one
"The dollar bulls are licking their wounds after the past
month, there are a lot of nerves on sterling again, but it seems
like a split decision where we go from here."
(Writing by Patrick Graham; Editing by Toby Chopra)