A tough start to the year for sterling continued this week as fresh lows were reached against both the euro and US dollar. Despite gaining ground on a quiet day across the markets on Monday, sterling could not be prevented from suffering further losses as both industrial and manufacturing production figures were revealed to have contracted throughout December. Following on from underwhelming growth data the previous week, this further indictment of the UK economy’s sluggish recent performance saw sterling fall to a five-and-a-half year low against the US dollar. Sterling continued to slide on Wednesday ahead of the release of the latest interest rate decision from the Bank of England (BoE) on Thursday. With expectation growing on Thursday that the Bank of England would vote unanimously to keep rates on hold for the first time in 6 months, sterling fell to a fresh 12-month low against the euro before recovering somewhat as the minutes showed the previous 8-1 split had been maintained.
Today sees the release of monthly retail sales data from the US, along with the latest BoE credit conditions survey. Considering the interest rates decision was released only yesterday, there are unlikely to be any surprises contained within this report.