A very mixed start to the week for sterling saw it lose over 1% against the euro whilst reversing recent losses against the US dollar.
With no major economic data released from the UK on Monday, sterling movements were largely driven by events elsewhere. The Organisation for Economic Cooperation and Development (OECD) released its economic projections yesterday, which suggested that the US economy may not bounce back as fast as recent US economic indicators would suggest. This news saw sterling make gains against the US dollar after a poor end to the week which had seen it lose over a cent.
In contrast to this, sterling struggled against the euro, as the single currency continued to strengthen. The catalyst for this period of strengthening was optimism that the Greek government would strike a deal with their creditors. Although there are very mixed signals from the parties concerned, it appears that investors are confident that we could see a deal before the end of the month. I’m not so sure.
Another quiet day lies ahead for sterling, with only trade balance data released this morning. Should this show a reduction in the current deficit, we could see sterling strengthen against its major peers.