After starting the week in a strong position, cautious rhetoric from the Bank of England (BoE) has seen sterling struggle towards the end of the week. With promising data out of the UK recently, sterling has strengthened across the board, reaching a five-year high against the US dollar. With little economic data out at the start of the week, sterling managed to maintain its strong position. Wednesday saw sterling lose ground yesterday as BoE Governor Carney sought to dampen speculation over an imminent interest rate hike. His insistence that there was still plenty of slack in the economy saw sterling struggle, even as unemployment forecasts were lowered. Despite falling to a four-week low against the US dollar yesterday morning, sterling recovered, showing that there is still strong support for the British currency thanks to recent economic data.
With no data out of the UK today, interest will focus on the US following US Federal Reserve Chair Janet Yellen’s speech during the night and the later release of building permits and consumer sentiment data.
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