Sterling traded within narrow boundaries yesterday, moving sideways against most currencies. Following the recent indication of a rate hike from Governor Carney, investors were eyeing the inflation rate announcement from the UK with interest. This had been expected to fall, but the drop to 1.5% represents the lowest inflation in the UK since 2009 and saw sterling lose ground across the board. The currency did recover throughout the afternoon to end the day in a strong position and very little changed from the start of the day.
Today sees the release of minutes from the latest meeting of the Monetary Policy Committee which will be very closely scrutinized for any clues as to when interest rates will be raised in the UK. We could see some rapid movements in sterling as investors digest the information.