Having seen limited movement in sterling for most of the week, we then had a day of drama yesterday as the European Central Bank (ECB) announcement at mid-day saw sterling gain nearly a cent against the euro in a very short period of time and then relinquish those gains during the remainder of the day. This just highlights how you need to be on top of your currency strategy and how you need to be ahead of the curve rather than hoping for the best. Yesterday’s peak for the euro yesterday was a 16 month high.
At the start of the week positive data from a number of industries helped to arrest the sterling’s recent downward trend. The release of purchasing managers’ indices (PMI) from both the manufacturing and construction industries at the start of the week both missed their forecasts, but showed that these industries had grown throughout the past month. This data, along with speculation over the upcoming rate decision from the European Central Bank (ECB) saw sterling hold its position. PMI data from the services industry gave sterling a welcome boost on Wednesday, as the largest sector showed sustained growth. Yesterday also saw sterling reaching the highest level against the US dollar since the end of May. Today sees little data released, with only labour data from the US providing any major interest.