A largely tough week for sterling has seen it lose ground against both the euro and US dollar. With a bank holiday in the UK on Monday, sterling weakened across the board as investor sentiment from the previous week carried over. Purchasing Managers’ Index (PMI) data from the manufacturing industry came in line with expectations on Tuesday, and did little to reverse sterling’s downward trajectory. Further below expectation growth data from the construction and services industry saw sterling fall to the lowest levels since early June against the US dollar as signs pointed to solid economic growth throughout the US.
Sterling did mount a recovery against the euro, however, gaining almost a cent-and-a-half following European Central Bank (ECB) President Draghi’s declaration on Thursday that deflation could take hold throughout the Eurozone.
A quiet day for sterling today sees attention shift back to the US with the release of average earnings and, more importantly the latest non-farm payrolls figure. This release is notoriously hard to predict, and could result in significant market movement given its influence on the Federal Reserves interest rate decisions.