Currency Note Sterling

Sterling up against the euro, down against the US dollar

By Callum Holmes October 31st, 2014

Even though UK data releases this week have been few and far between, sterling has seen some significant movement following data releases or announcements made elsewhere. The main event of the week came on Wednesday, with the announcement following the latest US Federal Reserve meeting which confirmed the end to quantitative easing. But it was the positive tone on employment that increased anticipation over an interest rate hike and saw the US dollar strengthen significantly with sterling falling to a fresh 2-week low against the US dollar. Sterling did recover slightly on Thursday, despite the latest economic growth forecast for the US economy exceeding expectations. Conversely, sterling recovered earlier losses against the euro as German inflation slipped to -0.3% to further fears over stagnation in the Eurozone’s largest economy.
We could see some movement in the euro today as investors focus on the Eurozone for the release of inflation data for the wider Eurozone area where further weak data could see sterling push close to 2-year highs against the euro.