A tough week last week for sterling saw it lose ground against the US dollar, the euro and most other major currencies. On Friday, disappointing growth data from the services sector saw sterling stumble. Better-than expected labour data from the States compounded this weakness to send sterling down to 11-month lows against the US dollar.
A relatively quiet week lies ahead for sterling, with manufacturing production figures starting us off on Tuesday. Following the pull-back in manufacturing growth seen last week, an increase in production could provide sterling with a lift. The main event from the UK will come on Thursday with the latest Bank of England meeting and its interest rate decision. Expectations are for UK interest rates to be held at their current low levels given the recent disappointing economic data and falling inflation. Outside of the UK, the International Monetary Fund begins a two-day meeting on Friday where they will discuss policy changes, and their outlook on global economies. Despite not being directly tied to monetary policy, the thoughts of this influential body has the potential to create significant market movement.