Sterling had a steady start to the week with the Confederation of British Industry distributed trades data holding steady at 31% against an expected fall to 25%. With the German IFO business climate survey coming in below expectations, sterling rose throughout early morning trading to a two week high against the euro. A more modest morning was seen against the US dollar but in the afternoon sterling did make some gains with the news that pending home sales across America had only grown 0.3% in September, a level some way below the expected 1.1% increase. Conversely, this also saw sterling lose ground against the euro as investors were drawn by a strong performance from the euro against the US dollar.
We expect a quiet day lies ahead for sterling, with attention focused on the US for the release of the Conference Board consumer sentiment data this afternoon. After the UK’s strong reading yesterday, US dollar speculators will be hoping for an equally positive result state-side.