Sterling had a broadly steady week last week following its surge at the end of the previous week. It did push up through the 1.70 level against the US dollar and hit five year highs as the Federal Reserve were more bullish about the US economy than markets expected.
A slow week lies ahead in terms of economic data releases from the UK, and any major market movements will likely be driven by events elsewhere. An announcement by BoE Governor Carney on Tuesday may affect the currency as investors will be keenly listening for any indicators on future monetary policy. This will be particularly interesting given last week’s release of minutes from the latest meeting of the monetary policy committee, which showed that policy makers had little stomach in the short term for an interest rate increase. Aside from this, the only other major event this week will be the release of the trade balance for the first quarter of this year, which gives a broad indicator of the demand for sterling. Other data releases will cover house prices, mortgage approvals, consumer confidence and updated first quarter growth figures.