While we were enjoying a typical August Bank holiday of rain and then even more rain, sterling seemed to have a moment in the sun gaining round against the euro. This was on the back of comments made by the President of the European Central Bank (ECB) at the summit in Jackson Hole where he made it clear that the ECB would do all it could to increase the fortunes of the Eurozone and minimise the risk of deflation. This hasn’t really changed sterling’s trend against the euro which has been one of moving sideways for the last month, it simply moved sterling towards the higher end of the recent range. Against the US dollar and other major currencies the medium term trend is more clear cut and one of continuing weakness.
UK data this week is limited and mainly focussed on housing. Mortgage approvals are released this morning and on Friday we have the release of the Nationwide House Price Index which will give an indication of the general strength in the housing industry, after remaining at a low of 0.1% in June. Between these, we see further data from the retail sector in the form of the Confederation of British Industry Realised Sales data. Therefore it is more likely news from elsewhere that will move sterling this week.