Chart: WorldWideMarkets Alpha Trader
Cable initially made an impressive 122 pip gain to 1.4995 from 1.4873 against the weaker dollar in early Europe following the news that Saudi Arabia and its Gulf Arab allies had launched air strikes against the Iran backed Houthi rebels in Aden, South Yemen.
Saudi Arabia's ambassador to the U.S., Adel al-Jubeir said "We will do whatever it takes in order to protect the legitimate goverment of Yemen from falling." in a news conference held in Washington D.C.
The quick gains however, proved to be unsustainable when the UK Retail Sales data was released at 9:30 GMT. The front headline was better than expected which pushed the rate 25 pips higher to test 1.4995. However, the Price Deflator was much weaker and pushed rates lower to 1.4905. The low deflator data gives reason for the BOE to further easing bias.
The U.K. February Retail Sales rose 0.7% m/m versus the 0.4% median forecast. The annual figure was 5.7% y/y versus the 4.7% median forecast.
The Retail Sales Deflator on the other hand, fell more than expected to -3.6% y/y, the largest fall since records begain in 1997. The deflator was pushed down by lower fuel and food prices.
The dollar received ostensible support today following the comments from Fed's Lockhart who said that meetings beginning in June will be live for a possible rate hike and marginally better-than-expected U.S. Jobless Claims. (12:30 GMT) Cable subsequently returns to its former levels at 1.4880 where Europe had opened.