A positive day for sterling on Wednesday saw it start to reverse the week’s losses against the US dollar, whilst showing minimal downwards movement against the euro. The currency was supported by comments from the Bank of England (BoE) policy maker Shafik that the next move for UK interest rates was still likely to be a rise. This went against the recent comments from another policy maker indicating we could actually see interest rates cut in the near future, and so was taken positively by investors. Sterling continued to struggle against the euro however, as the better than expected German IFO business climate index pushed the euro positively against sterling for the fourth consecutive day.
Today sees the release of retail sales from the UK, providing us with insight into the current consumer sentiment. After contracting throughout February, the first time in a number of months, an increase in retail sales could see sterling appreciate.