Another positive day for sterling saw the currency push higher against a number of its major trade partners, hitting its highest level against the euro in over two months. The purchasing managers’ index (PMI) for the construction industry was the only significant release from the UK on Tuesday, and this helped the cause – showing growth within the industry was in line with expectations. Following better-than-expected data from the manufacturing industry on Monday, this has left the UK economy looking positive ahead of the release of PMI data from the services industry today, a key piece of data as services make up 70% of the UK economy. This data could lend itself to sterling strength should it also show strong growth throughout October.
Sterling did however struggle against the US dollar on Tuesday, falling away from the recent 2-week high despite a slowdown in US factory orders. Later today, US focus will switch to Federal Reserve chair Janet Yellen who will be speaking and with the possibility of a December increase in US interest rates her words will be very carefully scrutinized.