Limited UK data last week saw sterling influenced by what was happening elsewhere which resulted in some unexpected weakening against the euro and it falling to a two-week low against the US dollar.
We have the closely watched Purchasing Manager Indices (PMI) for manufacturing released today, for construction tomorrow and services on Wednesday. All three have the power to affect sterling as they give an insight into the robustness and growth prospects of the UK economy and all three are expected to be similar to Octobers figures and show that all three sectors are still expanding. Also on Wednesday we will have the Chancellor undertaking his Autumn Statement. Osborne has very little room in which to move given the parlous state of the UK’s coffers but given the proximity to next Mays General Election it again has potential to move sterling sharply.
The latest decision on interest rates rounds off the week for sterling on Thursday, with only a slim chance of the Bank of England moving from record lows.