020 7898 0500Sterling started the week under pressure, falling against both the euro and US dollar on Monday with their being a lack of information released to support the UK currency throughout the early part of the week. Positive manufacturing growth data from both France and Germany saw sterling lose half a cent against the euro as trading opened, with signs of economic recovery in the Eurozone possibly delaying any expansion in the European Central Bank (ECB)’s quantitative easing program. Although sterling recovered many of these losses throughout the day, movement was largely muted in the wake of this data.
Sterling struggled more against the US dollar, falling to a three-week low ahead of the expected announcement by the US Federal Reserve that it is set to raise the discount rate offered to commercial banks. Although this would not carry the same weight as an increase in the federal interest rate, it could be seen as a precursor towards a December rate hike.
Today we will hear from members of the Bank of England (BoE)’s monetary policy committee as they address MPs at the inflation report hearings. Their words will be closely scrutinised for any clues regarding future monetary policy, and could see markets move significantly.
