020 7898 0500A tough week for sterling saw it fall to fresh lows against both the euro and US dollar during the week, as Bank of England (BoE) Governor Mark Carney talked down the prospect of a UK interest rate hike in 2016. With a bank holiday in the US on Monday, currency markets saw little movement due to reduced trade volumes. Tuesday saw the release of inflation data from the UK, which showed 0.2% growth throughout December – double the 0.1% economists had forecast.
Despite this positive news, Carney’s comments saw sterling fall to a 12-month low against the euro, and fall even further against the US dollar. However, Wednesday’s labour report revealed a drop in unemployment to 5.1%, and saw sterling arrest its recent slide across the board. The British currency then found further support on Thursday, particularly against the euro as European Central Bank (ECB) President Mario Draghi hinted that we could see a change in the ECB’s monetary policy as early as March.
The release of retail sales data this morning will provide the main point of interest for sterling today as it looks to extend its strength and best run in form of the year so far against both the euro and US dollar. Elsewhere, investors will be awaiting the latest manufacturing growth figures from around the Eurozone
