Sterling has struggled against its major currency partners this week, with a lack of data from the UK to support it against a resurgent US dollar. The trend against the US dollar is down and we seem to be heading towards levels last seen in early June. At the moment there seems to be very little to change this trend in the form of UK economic news. Against the euro we are seeing a period of consolidation for sterling having seen good sterling appreciation for most of this year.
The week started quietly, with no major UK releases to influence markets. However, sterling soon slipped against the US dollar, as consumer confidence stateside was shown to be at its highest levels since the financial crisis. Further strong US economic growth figures on Wednesday saw sterling fall to a seven-week low against the dollar. With unemployment claims from the states coming out as expected, sterling continued its slide yesterday. Performance has been slightly better against the euro, trading in a narrow range throughout most of the week. Sterling did lose ground yesterday, however, despite Eurozone inflation being estimated to miss its target. Today sees the most influential piece of data from the UK, with the Purchasing Managers’ Index (PMI) from the manufacturing industry. This is expected to have shown expansion throughout July, and could see sterling start the month with a welcome boost.