020 7898 0500Sterling has struggled over the past week, trending down towards 11-month lows against the US dollar while struggling to take advantage of a weak euro. Monday saw a rare day of positivity for sterling against the US dollar, with the previous week’s broad market crash still affecting the US dollar. Sterling faltered as the week progressed, with strong US data and a cautious tone from the latest meeting of the Bank of England’s (BoE) Monetary Policy Committee reinforcing sterling weakness. Thursday saw retail sales in the UK slide 0.3% in September, and contributed to further sterling weakness.
Conversely, sterling saw a week of strength against the euro for the first time in a month. With little data from the Eurozone this week, euro markets were stirred into action by news that the European Central Bank (ECB) were considering extending their asset buying program to include corporate bonds. With the potential for a significant increase in ECB intervention, sterling was able to recover some of the ground lost in recent weeks.
Today sees the release of the first estimate of UK growth over the third quarter of 2014. With the BoE expecting 0.9% growth, and the consensus estimate at 0.7%, sterling could see significant movement if we either fall short of or exceed expectations.
