A mixed start to the week for sterling on Monday saw it lose ground against the euro after four straight days of gains, a surprise given the Greek situation, while moving marginally higher against the US dollar.
The UK house price data for May was released on Monday, showing an increase of 3.0% month-on-month – but this positive data was largely ignored by the markets.
The Euro Area Trade Balance for April showed a significant surplus of €24.3 billion in April – surpassing the expected figure of 20.3 billion. This positive news saw sterling fall against the euro, as the Eurozone’s economic recovery seemingly begins to gain momentum. European Central Bank (ECB) president Draghi echoed this positive sentiment later in the day, causing sterling to fall against the euro. Sterling saw a more positive performance against the US dollar, thanks to a surprise slowdown in US industrial production.
Today sees the release of UK inflation data, with the consumer price index forming the most influential component of this data. Following an unexpected slip into negative inflation last month, economists are expecting this figure to rally with a 0.1% increase for May.