Sterling saw large gains yesterday, appreciating across the board, particularly against the euro. The release of minutes from the latest Monetary Policy Committee (MPC) meeting showed that all nine members had voted unanimously against any adjustment in the UK’s interest rate. The minutes did, however, reveal that a number of policymakers saw signs in the economy that there could be a “sooner than expected” increase in interest rates. Retail sales data, also released yesterday, rose by 1.3% over the past month, which was almost 1% higher than the forecast increase. This strong economic data saw sterling gain broad support as it rose to fresh 16-month highs against the euro, and recovered much of the ground recently lost against the US dollar.
Today promises to be much quieter on the data front from the UK, with only the second growth estimate being released this morning. Therefore it will be interesting to see how sterling moves today as the market digests the details of yesterday’s releases and we have significant data releases from elsewhere.
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