A mixed day for sterling saw it pare back losses suffered against the US dollar throughout Friday afternoon, whilst struggling to take advantage of heightened uncertainty surrounding the euro. With little economic data of note released throughout the morning, market movement was largely driven by reaction to the Greek referendum. Following a resounding ‘No’ vote rejecting the bailout proposals, many investors expected sterling to strengthen significantly against the euro. However, despite jumping to a one-week high when markets opened, sterling weakened throughout the day against the euro following news that Greek finance minister Varoufakis had resigned. Conversely, sterling strengthened against the US dollar, as a poor US non-manufacturing Purchasing Managers’ Index (PMI) reading proved to dent investor confidence in the US economy.
Today sees release of June’s manufacturing production figures from the UK. In addition, the National Institute of Economic and Social Research release their latest estimate of UK economic growth. However, events in the Eurozone are likely to dominate proceedings, with an emergency Eurogroup meeting in Brussels likely to provide further guidance on the direction of the Greek debt crisis.