Sterling continues to play second fiddle to the US dollar as the US economy continues to grow “strongly” and expectations of an increase in US interest rates rises. Against the euro, sterling continues to trade within narrow boundaries but very close to its multi-year high against the single currency.
After an uncharacteristically quiet week for sterling on the data front, things look to pick up in the week ahead with Purchasing Managers’ Indices (PMI) out of the UK. These will provide the first fundamental economic data out of the UK following the Scottish independence referendum. As ever, investors will be looking towards the key services sector data on Friday as the key release of the week, and a better-than-expected figure could inspire significant sterling strength. Preceding this will be data from both the manufacturing and construction industries which will still be watched with interest. Before this PMI data, we will see release of final UK growth figures on Tuesday, which is forecast to remain in line with previous estimations and show healthy growth in the economy.