Currency Note Sterling

Inflation and employment data key for sterling

By Smart Currency August 12th, 2013

Sterling had a relatively quiet Friday after appreciating sharply earlier in the week and traded within a narrow range against most of its major trading partners. UK trade balance data, which details the difference in value between imports and exports came in marginally better than expected as a result of increased exports and gave a slight boost to sterling performance. Following Mark Carney’s indication that interest rates could increase after a sustained period of inflation, this Tuesday’s Consumer Price Index, which is a key indicator of inflation, is likely to have a strong bearing on sterling performance going forward. Additionally, unemployment claims data released on Wednesday is also likely to be influential as levels of unemployment were another factor cited by Carney as having a significant bearing on future interest rates. On Wednesday morning we will also find out how the individual Monetary Policy Committee members voted on the most recent interest rate and asset-purchasing decisions. Sterling may suffer if the votes on the asset-purchase decision are other than unanimously in favour of maintaining current levels, as seen last month. Call your trader now to see if sterling can maintain its upward trajectory.