After a sour end to last week, sterling began marginal gains against the US dollar throughout Monday – but was unable to strengthen against the euro, thanks to stronger than expected German IFO Business Climate data. This will be a welcome outlook for the UK manufacturers, who have been struggling in recent months, as their exports have been affected by the strength of the pound.
The markets will be focused largely on the release of preliminary Gross Domestic Product (GDP) data from the UK this morning, looking to see how this affects sterling strength. The forecast figure is expected to show an increase of 0.3% from the last quarter. The US also releases their GDP figure on Thursday, so it will be interesting to see how both sterling and US dollar fare, especially as both countries plan to increase interest rates in the near future.