Sterling had a better day yesterday, trading slightly higher against the euro and holding its own against the US dollar. Sterling did strengthen against the euro first thing Monday due to the problems in the Ukraine. Strong retail sales data from the US was not enough for the dollar to weaken materially against sterling. Little in the way of key UK data was released yesterday although Rightmove Plc. did highlight that house prices had increased to an all-time high in April, with the housing boom finally showing evidence of spreading beyond London.
Today sees the release of core UK inflation data which is forecast to continue to decrease as it has since November 2013. Unlikely to have any major impact on sterling unless the data is significantly different from expectations. More likely to impact sterling, especially against the euro, are the on-going problems in the Ukraine and the possibilities of matters escalating which would be negative for the euro
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