There was no significant economic data out of the UK on Friday, so sterling’s fate was in the hands of external influences with the net result being that sterling gave back the gains it had made in the first part of the week. The US dollar benefitted from an upward revision to the US’s Gross Domestic Product (GDP) figure for the previous quarter from 1.5% to 2% although the last quarter disappointed. The euro benefitted from the Eurozone’s on-target Consumer Price Index (CPI) estimate although other Eurozone data disappointed.
Looking ahead, sterling is in for a busy week. We kick things off with the UK Manufacturing, Construction and Services Purchasing Managers’ Index (PMI) on Monday, Tuesday and Wednesday respectively. All are expected to continue to show industry expansion, but should data be lower than forecast figures, we could see further pressure on sterling. The busiest day this week comes on Thursday, where we are going to see the Bank of England (BoE)’s Inflation report and Monetary Policy rate decision released at midday, shortly followed by Governor Mark Carney’s speech regarding the decision. The results of these could affect sterling markets significantly.