It has been a mixed week for both sterling and UK data. Against a number of currencies sterling has shown improvement and yesterday we saw sterling push back close to recent highs against the euro. However against the US dollar the downward trend continues with no end in sight as the US dollar has the benefit of a growing economy and the likelihood of increased interest rates sooner than later.
As for this week’s UK data it started off with positive manufacturing Purchasing Managers’ Index (PMI) data, which hit three-month highs. This was in contrast to the weak construction PMI (now at five-month lows) and services PMI (at yearly lows). Thursday was the busiest day in terms of data and updates, with positive Manufacturing Production figures being released and the Bank of England, as expected, keeping both interest rates and their Asset Purchase Facility on hold. Although this contributed to some sterling strength, yesterday’s movements were dictated by what was happening in the Eurozone. Trade balance figures are due today, which are expected to show a deficit of over £9 billion for the last three months.