Sterling markets stayed fairly stable yesterday. The UK currency was almost unchanged against the US dollar, due to the potential interest rate hikes and who will move forwards first, the US or the UK. Bank of England (BoE) Governor Mark Carney said last week that the time for a UK rate rise is moving closer, based on the fact that the economy has been performing relatively well and that there has been a level of consistent growth above trend. It is estimated that the BoE could raise rates in early 2016. However, it appears that the US could potentially raise rates as early as this September – neither is in the immediate future, hence sterling stability in the face of little significant economic data.
Tuesday is also expected to be a quiet day in terms of UK economic data. First thing in the morning we will be expecting a positive Public Sector Net Borrowing figure. Any deviations from forecast could spell movement for sterling.