A positive day for sterling saw it reach a fresh six-year high against the euro, while poor retail sales data from the US promoted sterling to make up ground on the US dollar. With the European Court of Justice (ECJ) giving the European Central Bank the green light to continue its preparations for a quantitative easing program, sterling made early gains against the euro as anticipation for a wide-reaching bond-buying program increased. With Bank of England (BoE) Governor Carney further highlighting the difference between the UK and the Eurozone, sterling was able to take full advantage of the euro weakness to record a sixth successive day of gains.
In addition to this, retail sales in the US fell by 1% in December, falling below the forecast level of a 0.1% rise. This resulted in unexpected pressure on the US dollar and pushed sterling to a one-week high against the greenback.
Another quiet day on the data front from the UK lies ahead, with the focus very much on the US. Unemployment claims and the Philadelphia Federal Reserve manufacturing index will take centre stage, while comments from the German Bundesbank President will be particularly interesting in light of yesterday’s decision from the ECJ.