Sterling was again the stand-out performer today, as strong data from the construction sector boosted confidence in the UK economy and its currency. The Purchasing Managers’ Index (PMI) for Construction showed a greater acceleration than predicted, which saw sterling make sharp gains against most of its major partners, registering a 21-month high against the euro, whilst also extending its five-and-a-half-year high against the US dollar. These positive movements were also supported by the UK house price index release, which showed increased activity.
Today sees the final of the three PMI figures released this week, this time from the services sector. As the services sector is the biggest contributor to the UK economy, this is arguably the most influential release, and if this figure follows the path of the previous two, we could see sterling strengthen further. We also have early afternoon key announcements from the Eurozone, the latest decision on interest rates, and from the US, the non-farm payroll data, so we should and will more than likely have a very busy day on the currency markets.