Another tough day for sterling saw it lose significant ground across the board as comments from European Central Bank (ECB) President Mario Draghi saw the euro gain unexpected support. No major economic data was released on Wednesday, with investors listening intently for Draghi’s comments. As a result, sterling struggled to find any support throughout the day and drifted close to the lowest levels seen in September against the euro. Greater weakness was seen versus the US dollar, with sterling falling to the lowest levels in almost a month. Further disappointment came in the wake of Bank of England (BoE) member Broadbent’s comments that the global slowdown in prices could start to weigh on wage growth in the UK.
We expect another quiet day for sterling today on the data front, with investors again looking to the Eurozone and US for their economic data releases.