Tuesday was a mixed day for sterling as it began to recover some of the losses it suffered towards the end of the week against the US dollar, and managed to arrest its recent slide seen against the euro. The bank holiday on Monday meant that there was little movement at the start of the week, with the release of growth data from the construction industry delayed until Tuesday. When released, this data showed a surprise slowdown throughout April, with the industry drawing a pre-election breath. Confidence however remained high, with hopes that there will be a post-election pickup in activity.
Elsewhere, the significant increase in the US trade deficit allowed sterling to push higher against the US dollar, as investor confidence in the US economic recovery continued to waver.
Today sees the release of growth data from the services industry throughout the month of April. Following recent poor figures from both the manufacturing and construction industries, a positive reading from the larger services sector would benefit normally sterling. However, with the UK general election finally being held tomorrow, we are also likely to see increased speculation on the outcome have an effect sterling.