020 7898 0500A quiet day across currency markets saw sterling trade within narrow bounds on Monday, with no major economic data released which could affect prices. Following a disappointing end to last week, sterling found some support throughout the morning following comments from one of the Bank of England (BoE)’s committee members stating that interest rates should be raised ‘relatively soon’. With forecasters still confident of an early 2016 interest rate hike in the UK, there is still potential for further sterling strength, particularly against the euro as the Eurozone continues its programme of quantitative easing, although the list of potential banana skins for sterling is fairly long.
Sterling struggled more throughout the afternoon, as investors looked ahead to the start of the Federal Reserve’s two-day meeting, and Thursday’s US interest rate decision. This morning sees release of the latest inflation data from the UK, with a return to a flat 0% growth expected. Following July’s surprise growth, another increase could see sterling find support.
