After a tough week for sterling there was a largely positive end to the week which saw sterling make marginal gains against the euro whilst holding ground against a resurgent US dollar. With little UK economic data, sterling was able to make slight gains against the euro as both French and German manufacturing data missed expectations in the morning.
Speculation over whether the UK or US will next raise interest rates is set to dominate currency markets over the coming months. Although there is no rate decision due from the Bank of England (BoE) this week, the release of preliminary economic growth figures on Tuesday will provide insight into how the UK economy has performed over the past quarter and year. Expectations are for an improvement over the last quarter and steady growth for the twelve months. Importantly, this will give an early indication of what pressure there will be on the BoE to raise interest rates in the near term.
Aside from this, we are set for a quiet week for the UK, with only housing inflation data and some further consumer confidence figures to provide support.