Sterling has had a difficult week losing ground against most currencies and just about holding its own against the euro. Sterling’s path against the euro was a week of “two halves” with sterling pushing to a 23 month high against the euro prior to the release of the Bank of England minutes on Wednesday mornings and then proceeding to fall back to the weeks starting level by the end of play on Thursday. The main reason for sterling’s weakness was the content of the latest minutes from the Bank of England which highlighted their concern that an early interest rate hike could harm the UK’s economic recovery. With retail sales data also missing its target on Thursday, sterling fell further on Thursday to a one-month low against the US dollar.
Even though it has been a difficult week for sterling, the trend for sterling on the whole is still positive. Today sees the release of a preliminary growth estimate from the UK for the second quarter which is expected to show that the UK economy has now recovered to a size greater than that pre-crisis. So after six long years for many we are now hopefully all moving forward.