020 7898 0500Sterling stumbled at the end of a week which has seen it moved by news both from home and from elsewhere in the world. On Tuesday the consumer price index release was in line with expectations and therefore had little influence on sterling. However investors were becoming slightly nervous ahead of the Monetary Policy Committee’s minutes. When these were released on Wednesday, the votes were as predicted, and it showed no member felt more stimulus was necessary. This gave investors encouragement that the BoE was backing long term growth, and as a result sterling enjoyed fresh highs against the US dollar and the euro. Sterling then made rapid gains against the US dollar on Wednesday evening as the Federal Reserve decided much to the markets disbelief that they weren’t going to start tapering their programme of quantitative easing. Sterling then had to endure a rough ride yesterday, as retail sales became the first UK data in a while to come in significantly behind expectation with figures showing a decrease of 0.9% against an expected increase of 0.4%. As a result sterling lost ground on 11 of its 16 major partners. As a measure of consumer spending, this is an important economic indicator, and the less than impressive results have dampened enthusiasm for the economy’s recovery after recent good results had buoyed it. Today, things are a lot quieter to round off the week, so less volatility could be seen. Call your trader now for the latest rate on the pound, at the end of a roller coaster week.
