The British pound depreciated vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.9475 level and was capped around the $1.9635 level. Technically, today’s intraday high was right around the 50% retracement of the move from $1.8090 to $2.1160. Sterling was pressured lower on news that that the U.K. government plans to nationalize troubled U.K. financial institution Northern Rock Plc. Traders pushed the pair lower on concerns that other U.K. financial institutions might have significant exposure to asset-backed securities and collateralized debt obligations. Additionally, Bank of England Monetary Policy Committee member Besley – a putative monetary hawk – dovishly said With credit conditions tightening, we might expect a significant reduction in consumption growth over the coming months. Traders await Wednesday’s MPC meeting minutes to see if Besley voted for a rate cut this month. Besley added My time on the MPC, before and after the events of last summer, has reinforced my view that considerable weight should be placed on conditions in financial markets in understanding the transmission of monetary policy to the real economy. Data released in the U.K. today saw January retail sales in central London climb 3.7% y/y, the second slowest rise since November 2005. Cable bids are cited around the US$ 1.9260 level. The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.7520 level and was supported around the ₤0.7480 level.