RTRS:Sterling rises versus dollar, lags euro's gains
* Sterling rises versus dollar, up 0.2 percent
* Euro higher against pound, resistance at 21-day MA
* Investors await CBI data later
By Philip Baillie
LONDON, Oct 30 (Reuters) - Sterling rose against the dollar on Tuesday tracking a higher euro and firmer stock markets, though many investors were wary of pushing it higher unless the UK economy showed more strength.
Sterling traded 0.2 percent higher against the dollar at $1.6058, well within its recent trading range of $1.6310 to $1.5914. Near term support is seen at its 55-day moving average of $1.6019.
The pound slipped against the euro, which was up 0.1 percent at 80.55 pence in early trade. The euro has recovered from a low of 80.02 pence hit last Friday when investors cut bets on more asset-buying quantitative easing (QE) from the UK's central bank in November.
"This morning's move is dollar-led with sentiment a little negative towards the dollar and the euro will take over, but the pound is being driven by them at the moment," said Richard Wiltshire, chief FX Broker at ETX capital.
He said resistance was at the 21-day moving average of 80.75 pence with bids around the 80.30 pence level.
Better-than-expected consumer credit and mortgage data released late on Monday from the Bank of England added to a brighter picture of the UK economy, while hurricane Sandy saw U.S. markets close for a second straight day. That is likely to keep volumes on the lower side.
UK data showed consumer credit rose at its fastest pace in more than 4-1/2 years while mortgage lending and approvals also rose by more than expected.
This could further lower chances for more monetary easing next month. Stronger-than-expected third quarter growth figures released last week helped by one-off factors such as the Olympic Games saw investors curb bets on more QE, supporting the pound.
"We suspect that it will take a substantial deterioration in UK data flow to justify sustained downside in sterling from here," CitiFX told clients in a research note.
"In this regard, more resilience from the upcoming UK data releases (CBI retail sales today and October PMIs in next few days) could help sterling consolidate."
Investors will look to data from the Confederation of British Industry (CBI) due at 1100 GMT.
"Consistent with the improving tone of recent retail sales data, as consumers benefit from lower inflation, we expect the headline total sales balance to increase to 14, from 6 previously (consensus 8)," Barclays said in a morning note to clients.
