Last week was a positive week for sterling gaining ground against most other currencies. Against the euro it is back close to highs last seen in 2007 and against the US dollar it enjoyed its second week of gains in a row. The key question is will it be able to maintain this upward momentum in what is a quiet week for key and influential UK data releases? I suspect it’s movement is more dependent on what happens elsewhere.
As noted, the week ahead sees little in the way of influential releases from the UK, with Wednesday’s quarterly inflation report from the Bank of England (BoE) providing the major talking point. With an uncertain situation in the Eurozone, as well as sluggish global economic growth, it will be interesting to see the BoE’s views on how events will affect the UK economy in the near future. The accompanying speech from BoE Governor Mark Carney could also see increased movement in the markets, with investors paying keen attention to any hints relating to interest rate decisions.
Aside from this, industrial and manufacturing production growth figures on Tuesday are likely to be the major supporting figure. Should this follow suit from strong growth data released last week, we could see further sterling strength.