A mixed day for sterling yesterday saw it post its first day of gains against the euro in over a week, whilst slipping to a fresh five-month low against the US dollar. Early morning data revealed a smaller-than-expected deficit in the UK’s current account, and together with UK economic growth being in line with expectations, sterling found support across the board throughout the morning. However, in the afternoon we had the release of the US ADP non-farm employment change figure, which provides an estimate of Friday’s influential US non-farm payroll figure, and this figure showed a greater-than-expected increase in new job opportunities. Consequently, sterling fell against the US dollar for a ninth straight trading day.
Today sees the release of purchasing managers’ index (PMI) data from the manufacturing industry. Following a poor August figure, investors will be looking for an increase in this figure to demonstrate continued growth in the UK economy.