Sterling recovered from one month lows versus the dollar on Thursday as some investors speculated that UK retail sales data could surprise on the upside, potentially dampening rate cut expectations.

Surveys from the British Retail Consortium have pointed to a rebound in sales and a pick up in prices last month. Official figures, due at 0930 GMT, are expected to show sales grew 0.2 percent, after contracting 0.4 percent in December.

"Sterling has sold off pretty aggressively since last Wednesday on not a lot of news, and I suppose there will be some pause before we tackle the range highs in euro/sterling," said Paul Robson, currency strategist at RBS Global Banking.

"Retail sales might surprise a bit on the upside, our economists think we might get as high as 0.6 percent on the month on month change ... But from a medium term perspective we do remain negative on sterling."

Sterling rose 0.2 percent to $1.9455, about a cent above Wednesday's one-month lows, staging a tentative recovery after closing down for four trading days in a row.

The euro edged lower to 75.88 pence after coming within less than half a pence of January's record high of 76.13 pence the previous day.

The pound has come under pressure on expectations of three more interest rate cuts this year as the Bank of England strives to shore up a slowing economy.

Minutes from this month's BoE meeting -- when it administered a 25 basis point cut to 5.25 percent -- showed one policymaker had voted for a bigger, 50 basis point move.

Reports from individual UK retailers have been mixed, with results this week from chocolate seller Thorntons showing it cashed in on demand for its traditional and additive-free treats, while car dealer Pendragon saw its profits halved compared to last year.

Sourced by Reuters.