Sterling’s fate tied to other currencies today, in the run up to significant UK data on Tuesday

After powering to a strong end last week due to poor US data, sterling’s fate today will again largely be in the hands of Eurozone and US data.

It is set for a slow start to the week, with the first key focus for the week on Tuesday morning, where we see a raft of inflation data released from the UK. Consumer Price Index (CPI) dropped below 0% into negative territory in October and the forecast figure is expected to remain at -0.1%. As inflation data is a key driver in raising interest rates and following the recent cautious tones from the Bank of England (BOE), some shock inflation data would be required to cause more BOE members to re-address their standpoints.

Thursday will also be another telling day, with retail sales data released. Following a steady month for September, the forecast figure of -0.2% for October suggests a sharp drop off. Any surprises here and or with inflation data could spell movement for sterling.