A mixed day for sterling saw it make strong gains early on against both the euro and US dollar before being pegged back over the course of the day. Sterling started the day on the up as German industrial production fell by the largest margin since mid-2009, increasing fears over the state of Europe’s largest economy. Sterling then fell away following the release of unchanged industrial production figures and manufacturing production figures that had risen for the third month in a row, albeit below forecast levels. Sterling struggled further as the National Institute of Economic and Social Research lowered their growth estimate for the previous quarter. Coupled with news that the International Monetary Fund (IMF) had improved their growth forecast for the US, sterling lost its earlier gains against the US dollar and ended the day only marginally improved versus the euro. Overnight sterling has slipped further.
Today sees housing inflation data from Halifax, which is forecast to show a slight increase of 0.2%. Of greater importance will be the release of minutes from the US Federal Reserve’s latest meeting. With the US economy showing signs of picking up recently, the markets will be looking to see if this is influencing any voting members. Any surprising results could impact sterling strength.