Sterling ceded ground yesterday as manufacturing production figures showed output throughout May shrank for the first time since October 2013. Following last week’s purchasing managers’ index, which showed robust growth in the manufacturing industry, factory output was shown to have shrunk by 1.3% resulting in sterling falling sharply across the board. Furthermore, industrial production as a whole contracted by 0.7%. This deficit was gradually erased against the euro and US dollar throughout the day following robust growth estimates from the National Institute of Economic and Social Research providing a welcome boost for sterling.
Housing inflation data from Halifax released this morning demonstrated a 0.6% reduction in house prices which has caused some early sterling weakness. The main event however, is set to be the release of minutes from the latest Federal Open Market Committee (FOMC) meeting in the US, which is likely to generate significant market interest as investors look for clues as to when the US Federal Reserve could look to raise interest rates.