Sterling continued to climb versus the US dollar on Monday, while struggling to make headway against a stubborn euro. Following the disappointment of last week’s inflation figures, an increase in housing inflation to 2.6% in October provided a timely boost for sterling. With little supporting data from the states, the US dollar was unable to resist the rise by sterling. Despite this, confidence in the UK economy is still tentative and mixed, with Barclays yesterday pushing back their forecast for an interest rate increase to November 2015. With sterling already holding a strong position against the euro, it traded largely sideways throughout the day despite a contraction in the German Producer Price Index.
With minutes from the latest Bank of England (BoE) meeting released tomorrow, we can expect markets to be tentative throughout today, with little influential data set to be released.