Sterling gains across the board with a resilient performance yesterday

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It was a mixed day for Sterling yesterday with poor data releases not really denting Sterling's performance. UK public sector net borrowing in April was expected to be at £4.4 billion showing a vast improvement from £15.6 billion in March. The actual figure, despite being less than March's figure, was still nearly double expectations at £7.7 billion, the biggest ever April deficit.

The markets reacted by selling Sterling before focusing on the next piece of data from the Confederation of British Industry (CBI), who reported that retail sales in May had fallen to 18 from 21 in April. The figure was better than expected, with the markets predicting a 10 point fall to 11, which prevented Sterling from suffering further.

Sterling showed a similar resilience to news that credit ratings agency Moody's is contemplating a reduction in the credit ratings of more than a dozen UK banks when the government removes its support for them.

Sterling was so resilient yesterday that, along with the Swiss Franc, it was the joint best performing currency. Sterling didn't make huge gains, but every little helps - up half a Euro, up half a US Dollar and up an Australian Dollar. It is mystifying on a day when public sector borrowing was greater than forecast and the threat of downgrades for UK banks that Sterling managed such a stellar performance.

Eurozone industrial new orders adversely affected Euro sentiment yesterday, falling by 1.8% in March and reducing the annual growth rate to 14.1% from 21.5%. In the US, there was a decent 7.3% increase for new home sales in April.

Today's key economic releases include German consumer confidence, the revised Q1 GDP figure from the UK and US April durable goods orders. Time will tell if Sterling can manage another miraculous performance today.