A positive week for sterling has seen it post gains against both the euro and US dollar amid mounting speculation that the Bank of England (BoE) could soon raise interest rates.
After a quiet start to the week, sterling regained some ground against its major trade partners as positive data from both the US and Eurozone was largely ignored. The British currency then made significant gains across the board on Tuesday, as UK economic growth for the second quarter grew to match the pre-recession peak of 0.7%. This positive sentiment continued into Wednesday, with sterling hitting a one-week high against the euro and continuing to rise against the US dollar thanks to a largely indifferent statement from the Federal Reserve. Thursday again saw little fundamental data released, meaning sterling was able to continue strengthening against the euro and US dollar – until the announcement of annualised US economic growth of 2.3% allowed the US dollar to stage a late rally.
Not much is set to be released today – although should inflation data from the Eurozone disappoint, we could see further positive movement for sterling against the single currency.