Following a positive start to the day, sterling drifted lower against both the euro and US dollar as news from elsewhere once again proved to be the major determinant of rate movements. The UK currency started the day in high spirits, with early gains seen across the board following comments from Bank of England (BoE) policy maker Weale that interest rates could increase as soon as August. This comes in light of strong labour data, although it is unlikely we will see a rate hike arise this early in the year.
Sterling found itself trading within wide boundaries ahead of the evening’s Eurogroup meetings where, Eurozone finance ministers were set to discuss a cash-for-reform deal with the Greek government.
Sterling also struggled throughout the day against the US dollar, as confirmation of 0.2% economic growth throughout the previous quarter saw sterling fall to a one-week low against the US currency.
Once again we will be looking elsewhere for the major news releases today. Fallout from last night’s Eurogroup meetings looks set to dominate headlines, while unemployment claims from the US could provide further support to a US dollar on the rebound.