Sterling performed well against the US dollar yesterday following a fall in US durable goods orders. Against the euro it struggled as there was no major UK data release and sterling started to trend downwards after failing to break through overnight resistance levels. An unexpected rise in German import prices saw sterling continue to fall away against the euro although it still remains well placed against the single currency. Conversely, sterling hit a week-long high against the US dollar as durable goods orders disappointed. The largest move of the day for sterling came against the Swedish krona, where the unexpected decision by the Swedish Central Bank to slash interest rates to 0% saw sterling gain over 1% against the krona throughout the course of the day.
A quiet day lies ahead, with mortgage approvals from the UK likely to cause a muted impact. The main focus will be on the statement released from the Federal Open Market Committee (FOMC) later in the evening. We can expect increased volatility in the wake of this as investors digest the content of the statement.