LONDON (AFX) - Sterling shed some of its gains in early London trade but the second quarter GDP preliminary figures is likely to spark some life back into the unit, dealers said. "While UK data has played only a limited role in sterling-dollar trading of late, good data should underpin sterling's recent gains," said Hans Redeker, head of strategy at BNP Paribas. For Neil Parker economist at the Royal Bank of Scotland today's release of preliminary UK Q2 GDP will be key release for financial markets. "After yesterday's disappointing retail sales the financial markets are likely prepared for a weaker outturn and therefore it would likely take more than this to undermine sterling against either the euro or the dollar," he said. The AFX News consensus forecast of economists is for Q2 GDP preliminary estimate to show a quarter-on-quarter 1.0 pct rise, and a year-on-year 1.6 pct increase. Separately talk of merger and acquisition, with the sale of Burger King going through, will provide additional support to sterling, said Chris Furness senior currency strategist at 4Cast. Texas Pacific of the US is expected to buy Burger King from UK's Diego for 1.4 bln stg. "There has been talk that Diageo will distribute some of the profits (from Burger King's sale) to shareholders, which will provide further support for sterling," said Furness. The euro was a touch lower against the dollar but managed to stay above parity with the dollar. With little by way of economic data on the calendar today, activity on the stock markets will remain key, dealers said. Meanwhile the yen recouped recovered a little ground following a sharp slide in Japanese shares, with the nikkei 225 closing the session down 339 pts. Separately, fears over the health of a Japanese insurer and media reports and speculation that US mutual funds are selling shares in order to repatriate funds significant investor liquidation added to negative backdrop for the yen, said RBS analysts. Japanese authorities are becoming increasingly nervous about the state of the economy. Intervention will become a topic again as the economic risks are similar to those seen in September last year, said Redeker. "Since European insurance and the US financial sector are considering repatriating funds, euro-yen will be the ultimate winner," he predicted.