* Graphic: sterling and gilt yields bit.ly/2dgAXn1
* Graphic: World FX rates in 2016 tmsnrt.rs/2egbfVh
By Patrick Graham
LONDON, Nov 30 Sterling steadied in the middle
of a 3-cent range it has held for most of the past month on
Wednesday, any further progress against a slightly weaker euro
undermined by a weaker reading of British consumer sentiment.
Confidence among British consumers fell in November to its
lowest level since just after voters decided in June to leave
the European Union, the regular survey by market research firm
GfK showed on Wednesday.
Investors were also digesting the need for more capital at
British bank RBS after it failed the Bank of England's latest
round of stress tests.
With the prospect of Brexit talks next year set to weigh on
business and the economy, and the risk that banks will relocate
business out of the UK, neither of those were read as positive
overall signs for UK Plc.
"The news this morning shows that UK financial institutions
are realistically nowhere near capable of fending off another
financial crisis," said James Hughes, chief market analyst at
broker GKFX in London.
"Many will say that a global crisis is not on the horizon,
however with UK reliant on borrowing from other nations to
finance its now growing deficit, the global trend of rapidly
increasing debt paints a very worrying picture."
The pound inched down less than 0.1 percent to 85.32 pence
per euro and was roughly steady at $1.2493.
Sterling last week racked up its longest run of weekly gains
against the euro since early 2015, helped by a run of data which
has broadly failed to deliver signs of the rapid slowdown many
had expected after the June referendum.
Data on Tuesday showed lending to Britons expanded last
month at the fastest annual pace in 11 years, while mortgage
approvals were stronger than expected.
Yet the GfK reading is another sign that the economy does
appear to have peaked. Investment readings in the breakdown of
British third quarter gross domestic product this week were
better than expected, but still showed investment falling in
Analysts widely expect the pound to fall further as talks on
the departure from the European Union are launched in the first
quarter of next year, pointing to the likelihood that the
economy will slow further.
But the lack of major further developments on either front
has put the pound on the back burner for now for traders in
"Tuesday trade saw the currency in decent demand, though it
would be overstating things if we were to say the price action
was head turning," analysts from currencies exchange LMAX said
in a morning note.
"Ultimately, the Pound remains confined to a range at the
moment, with the market waiting for that next catalyst to get
(Editing by Andrew Heavens)