The pound dollar exchange rate is 0.08 pct in the red at 1.5855 - not a bad scenario if we consider the overwhelmingly bias towards the US dollar that current market conditions would suggest.

Indeed, the US currency has taken a 0.33 pct chunk out of the euro and a 0.16 piece out of the Australian dollar.

That said, the pound sterling looks vulnerable to further losses against the dollar:

"Amplifying the suspicions that the Bank of England will engage in further easing, UK retail sales were much lower than analysts had previously predicted, coming in at -0.8%. High inflation was the implied cause for the decline, as the higher cost of food and clothing made these items less affordable," says a currency market note from RationalFX.

The Pound remained firmly on defensive on Thursday with a further test of support below 1.5850 against the U.S Dollar.

The UK currency bounced back towards 1.2450 versus the Euro, despite a report from the Office of National Statistics, which showed that the latest retail sales report was weaker-than-expected with a 0.8% decline in sales for October.

That followed a revised 0.5% gain the previous month and the data reinforced concerns surrounding the growth outlook following Bank of England warnings that there could be another GDP contraction for the fourth quarter.

"There were also concerns surrounding the risk of a credit-rating downgrade following Moody’s warning that the AAA credit rating could be lost. There was also uncertainty surrounding the potential for further quantitative easing but the Pound gained some protection from a lack of confidence in the Euro-zone," says Adam Solomon at TorFX.