Currency Note Sterling

Sterling (finally) gains against the US dollar

By Ricky Bean February 6th, 2015

In what has been very much a week of two halves for the currency, sterling looks to end the week close to where it started the week and close to seven-year high against the euro, and at the best price in a month versus the US dollar.

A tough start to the week saw sterling lose ground as expectations of when the Bank of England (BoE) would look to raise their benchmark interest rates from a record low 0.5% moved into 2016. However, with growth data from the manufacturing, construction, and services industries all pointing to healthy growth in the UK economy throughout January, sterling rebounded strongly as the week progressed. In addition to this, Thursday brought news that the European Central Bank (ECB) had toughened their stance on Greece, announcing plans to increase the borrowing cost for Greek banks from 0.05% to 1.55%. Additionally, with the US trade balance also reporting a greater-than-forecast deficit, sterling was able to push higher across the board to enter Friday in a strong position.

Investor focus today will be on the US, where we will see the release of non-farm unemployment figures. This figure has historically fluctuated, and any significant swing either way is likely to affect the markets.