* 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 Ritvik Carvalho
LONDON, March 23 The pound hit a month's high
against the dollar on Thursday as investors awaited UK retail
sales data expected to turn positive for the first time in three
A surprise third monthly fall running in retail sales in
January pointed to cooling consumer sentiment, the first major
sign of weakness in the British economy since last year's vote
to leave the European Union.
A dramatically weakened pound - which has lost nearly a
fifth of its value following the EU referendum - has driven up
the prices of goods, with data showing consumers spending far
less on non-essential items.
Sterling touched a day's high of $1.2517 against
the dollar shortly after the start of European trading, last
trading at $1.2488, up 0.1 percent on the day.
This was above Wednesday's low of $1.2424 the pound had
briefly hit after a knife-wielding attacker outside Parliament
in London killed three people and injured 40 before being shot
dead in what British police called a terrorist incident.
Sterling was 0.2 percent higher against the single currency
at 86.34 pence per euro.
A Reuters poll of economists shows February retail sales
recovering by 0.4 percent, up from January's negative reading of
Analysts at UniCredit said despite a forecasted recovery,
Thursday's retail sales figures were likely going to be bearish
for the pound.
"UK retail sales for February this morning are not seen
fully reversing the drop that emerged in January and will likely
offer investors an opportunity to take some profit after GBP-USD
being lifted in the past few days by both strong inflation
numbers in Britain and renewed USD weakness across the board,"
they wrote in a note to clients.
"That said, we remain skeptical about sterling’s fortune in
the near term. We expect more and clearer evidence that the UK
economy will further deteriorate going forward."
(Reporting by Ritvik Carvalho; Editing by Tom Heneghan)