Having finished the previous day in strong fashion, sterling found itself on a downward trend yesterday morning ahead of the release of growth data from the construction industry. Despite this showing better-than-expected growth throughout the sector in August, sterling still fell to its lowest levels against the US dollar since March, while losing much of the past week’s gains against the euro.
Key to this decline was the release of a YouGov poll showing just a six-point difference in favour of the ‘no’ vote in the upcoming referendum on Scottish independence. With the vote only two weeks away, yesterday’s uncertainty around sterling could be indicative of the increased market fluctuations that we are likely to see in the run up to the decision.
Today we see the release of growth data from the services industry. As this is the largest contributor to the UK economy, a strong result could see sterling begin to recover some lost ground ahead of Thursday’s interest rate decision.