A difficult start to the week for sterling saw it initially lose ground, despite there being little in the way of UK economic news released. With a bank holiday in the US, and a fresh round of Eurogroup meetings ongoing throughout the day, news flow was limited. Mixed messages were released from the Eurogroup meetings throughout the day, with investors unsure whether a deal could be reached over the Greek debt crisis. Come the end of the day it became clear that no deal had been reached which then saw sterling regain lost ground against the euro.
The release of inflation figures from the UK today represents the first major data release of the week. After Bank of England Governor Mark Carney’s recent warning that inflation could dip below 0% in the short term, a drop below the 0.4% level forecast would not be unexpected. Not necessarily bad for the UK economy as the fall in inflation is driven by a reduction in energy costs which should boost the general UK economy.
Sterling may be facing mixed fortunes.