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The European Central Bank has left its interest rates on hold and maintained its current pace of bond purchases. ECB President Mario Draghi was rather vague in his rhetoric – with no "specific" developments but that there is still much "uncertainty" about the eurozone's future. The current programme will remain in place “until the end of December 2017, or beyond”, and until inflation is on a clear upward path.

During the press conference Mr. Draghi said Inflation is not where we want it to be, nor where it should be, which is why a substantial degree of accommodative monetary policy is still needed.

The euro which has risen sharply over the past few weeks on expectations that the central bank may indicate a preference to tighten monetary policy, came under slight selling pressure after the EBC announcement, trading at EURGBP 0.89050 after trading at an 8-month high of 0.89498 on July 12.

UK retail sales rose by 0.6 per cent in June, beating economist forecasts, following a fall of 1.2 per cent in May. Average store prices increased by 2.7 per cent on the year after a rise of 3.2 per cent in May, which the Office of National Statistics put down to declining fuel prices.

Sterling jumped back over $1.30 when the retail sales figures hit the wires, but soon dropped half a cent to trade around $1.2960. A close here on the daily chart would likely spark further declines. Further losses would target the $1.2905 area, and then towards $1.28. Cable would need a daily close back above $1.3048 to reverse the bearish outlook.

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--- Written by Katie Pilbeam, DailyFX