A mixed week for sterling last week saw it gain ground against the euro, lose ground against the US dollar and hold relatively steady against the other major currencies. On Friday, Mark Carney, the Governor of the Bank of England, reemphasised that an increases in UK interest rates would be gradual. Not a huge surprise but it did dampen sterling’s progress against the euro during Friday.
This week ahead sees little in the way of influential data releases from the UK, although the G7 meetings throughout the week may generate some market movements. Here, we are likely to see a number of economic policies discussed – including the global slow-down in economic growth and the continuing stalemate with Greek debt, both of which have the potential to impact global currency markets. Investors will be eager to hear the insight of finance ministers from seven of the most influential countries on the planet.
Aside from this, the second estimate of UK economic growth for the previous quarter is set to be released on Friday, which is expected to show a slight improvement from the first estimate. However, if the estimate points towards a further slowdown in the UK economy, we could see sterling suffer towards the end of the week.