An eventful end to the of last week initially saw sterling stretch its gains further against the euro, reaching another seven-year high against the euro before falling away across the board as markets reacted to lower-than-expected UK retail sales throughout January.
A quiet week for UK data releases lies ahead for sterling, with most market movement likely to be driven by fallout from talks between Eurozone finance ministers and the new Greek government. We will see some limited UK data with further consumer spending data released today. Despite lagging behind the headline retail sales figure of Friday, the Confederation of Business Industry retail sales survey can still cast an interesting insight into both retail and wholesale consumer activity. However, the major event for sterling looks to be the second estimate of economic growth for the fourth quarter of 2014 which is expected to mirror the first estimate which detailed growth at 0.5%.
Therefore we could be in for a mirror image of last week where the difference between the highs and lows for sterling against both the euro and the US dollar was around two cents during the week but by the end the week sterling closed close to where it started. Again highlights the importance of timing.