With few significant data releases to support the currency, sterling suffered a tough week compared to the currencies of its major trade partners. Sustained market optimism in the euro following last week’s decision by the European Central Bank (ECB) to maintain a 0.25% interest rate saw sterling fall to the lowest level against the euro in 2014, before recovering somewhat on Thursday following increased speculation that the Bank of England (BoE) may raise interest rates in the near future. This recovery was also seen against the US dollar, with sterling pushing back through the 1.67 level on Thursday after falling to a one month low earlier in the week, before falling once again following better than expected unemployment data being released in the US.
This morning sees release of the global goods trade balance from the UK, providing an insight into the balance of imports and exports in the UK. Greater interest will be focused on inflation data from the US, the pending referendum in Crimea and next week’s Annual Budget Release.
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