020 7898 0500Sterling started Friday gaining ground against the euro as expectations were high for a better than expected US non-farm payroll data announcement later in the day. However, a much lower-than-expected US non-farm payrolls figure saw sterling plunge nearly two cents against the euro in just over an hour, hitting a fresh five-month low, and make a second straight day of gains versus the US dollar. Construction industry growth data showed a significant increase in the sector compared to August, although this was largely overlooked in the wake of the more influential US labour data.
Sterling gets off to a quick start this week, with services Purchasing Managers’ Index (PMI) data released later this morning. Following Friday’s better-than-expected figures from the construction industry, a strong reading here could see sterling make gains given its significance to the British economy. Manufacturing production figures on Wednesday will provide the next point of interest, and following a disappointing figure last time, positive manufacturing production growth could provide sterling with a welcome boost.
Thursday’s interest rate decision is likely to pass with little fanfare, with a rate hike off the table for the time being. Should there be any change from the 8-1 split in favour of keeping rates on hold, though, we could see further movement for sterling.
