A good Wednesday for sterling saw it hit highs against both the euro and US dollar during the morning. With no major economic data released from the UK yesterday, sterling movement was “measured” as investors remained unwilling to speculate unduly on movements against either the euro or US dollar. Bank of England Governor Mark Carney spoke during the morning, but with the subject of his speech focused on research and not monetary policy, there was little market reaction to this. Similarly, US Federal Reserve chairperson Janet Yellen reiterated comments made on Tuesday which has reduced expectation of an imminent US interest rate increase which has seen sterling strength against the dollar.
Today sees the release of the second estimate of UK economic growth for the final quarter of 2014. Should we see any revision to the initial estimate of 0.5% growth, we may see increased sterling movement. Elsewhere, the release of inflation figures from the US will provide an indication whether the recent fall in oil prices is still having a major effect on the US economy.