020 7898 0500This was a week of two halves as Thursday afternoon saw an explosion of activity as sterling fell sharply across the board, largely erasing the gains seen earlier in the week. This came as the Bank of England’s quarterly inflation report revealed a cut to the inflation forecast with inflation expected to remain below 1% until the second half of 2016. With this, the likelihood of a UK interest rate increase was therefore pushed back and sterling found itself under pressure, falling across the board and losing around two cents against the US dollar and the euro.
This contrasted to a largely positive week for sterling as it make significant gains on the back of positive data. Purchasing managers’ indices for all major UK industries were released this week, and showed significant growth throughout October. This data gave sterling a lift throughout the early part of the week, sending the currency to a two-and-a-half month high against the euro.
Today sees the release of manufacturing production figures from the UK. Should these echo the better-than-expected manufacturing PMI figure seen earlier in the week, we may see sterling recover some lost ground but we also have key US data released which will have an impact on sterling.
Sterling is still close to multi-year highs against the euro but this week highlights how quickly sterling can move and why we suggest contacting your trader now for live rates, news and currency-purchasing strategies.
