Sterling struggles as likelihood of interest rate increases recede

Sterling started the week in downbeat fashion, struggling to gain a foothold and losing nearly a cent against the euro over the course of the day. There was no data of any significance to impact sterling markets yesterday, which resulted in investors having little cause for optimism following a recent run of negativity. With nothing to support the currency, some insight was taken from words from Bank of England (BoE) Governor Mark Carney. In an interview, he stated that the BoE’s policy could be influenced by weakening growth in the Eurozone. This implication that targets in key areas could not be reached as soon as first thought brought the idea that rate hikes could be slower in materialising, harming the currency’s performance.

Today brings some significant activity, with inflation figures coming first thing in the shape of the Consumer Price Index (CPI). This is a crucial area. As it is the key release of the day it will be the main talking point and provide opportunity for markets to react.