After a tough couple of weeks, sterling has seen a marked turnaround over the past few days, strengthening against both the euro and US dollar despite a lack of supporting economic data from the UK.
Sterling suffered against the euro at the start of the week, losing over 1% as optimism that the Greek government would strike a deal with their creditors saw the euro strengthen across the board. However, better-than-expected trade balance figures released on Tuesday allowed sterling to make marginal gains against the euro, whilst an upturn in May’s industrial production data allowed for further strength on Wednesday. With Thursday signalling the end of the latest round of talks between Greece and her creditors, and no fresh deal on the table, sterling consolidated its position on Thursday, pushing close to the highest levels seen against the euro since the start of June.
Against the US dollar, sterling was boosted by the Organisation for Economic Co-operation and Development (OECD)’s projection that US economic growth may be slowing down, contrary to popular belief. With US retail sales increasing by 1.2% throughout May, sterling found itself falling against the US dollar on Thursday, although it still remains at a much higher level compared to the start of the week.
With no major data released from the UK today, investors’ attention will be focused on the fallout from the stalled debt talks in Greece and on the release of the US producer price index, as well as the latest US consumer sentiment survey.