Sterling up against the euro but struggles against the US dollar

Despite a quiet start to the day, sterling performed well against the euro on Monday – but briefly fell to its lowest level since April against the US dollar. Sterling was able to gain ground against the euro on Monday, as both German retail sales and Italian inflation data missed their forecast level.

In contrast to this, however, the British currency struggled against the US dollar during morning trading, as investors focused on the increasing likelihood of an interest rate hike by the Federal Reserve. Sterling did recover throughout the afternoon, but still finds itself in a weakened position heading into Tuesday.

Today we see the results of the latest bank stress tests, which will determine the ability of UK banks to face financial turmoil. Later in the day we will have the first of Novembers purchasing managers’ indices (PMI), which will be manufacturing, and hear from Bank of England (BoE) Governor Mark Carney.