A quiet day across the board saw sterling trade within narrow bounds on Monday. Markets remained largely unmoved by pending home sales in the US, reporting back at a lower-than-expected level, with investors hanging back to see what comes of more influential data releases later in the week.
In contrast to Friday’s announcement that the UK economy had returned to its pre-crisis level, the number of UK companies which issued a profit warning in the first half of 2014 has hit a three-year high according to consultancy firm EY. Citing increased competition and a strong pound, this highlights the issues a strong currency could pose for UK manufacturing and exports. This may increase pressure on the Bank of England (BoE) to delay any raising of UK interest rates. Today sees little in the way of notable data releases, with an announcement of net lending to individuals through June providing the main event from the UK. So if there is any movement in sterling exchange rates today it is likely to be generated by news from elsewhere.