Following a strong performance in the previous week, sterling found itself losing ground against its major trade partners this week as UK economic data undermined sterling. It reached a four-year high against the US dollar on Monday morning after a report from Smart Currency partner Rightmove showed that house prices had risen over the past month. These gains were soon erased. Prices fell off further on Tuesday as inflation figures highlighted that inflation during the past year stood at 1.9%, a level below the 2.0% target set by the Bank of England (BoE), which reduces the likelihood of the BoE increasing interest rates any time soon. Despite a brief rally on Wednesday, data showing a rise in unemployment over the past month to 7.2% undermined sterling further. A quiet day on Thursday saw sterling lose more ground against most of its major trade partners.
Today we have the retails sales figures for January. Given the difficult UK economic data released so far this week, any shortfall from expectations could see sterling loose further ground very quickly.
This week highlights the importance of being prepared and well informed on exchange rates, so if you want to be well prepared call your trader now for the latest rates and updates.