Sterling finished off last week with a flourish, making gains across the board. These advances came as retail sales figures sailed past expectations of 0.5% to register at 2.6%, the strongest December data on record. Markets appeared to ignore an adjustment for seasonality as the retail push in December may have been related to the holiday season rather than a brighter outlook for UK retail overall. This caused sterling to appreciate sharply, particularly against the US dollar, where it appreciated by the most in a month. The stronger sterling is a boon for businesses purchasing other major currencies although those selling abroad should probably look to protect margins as sterling may continue its upward swing.
This week we see little significant data from the UK until Wednesday, when we will be privy to Bank of England thinking behind their quantitative easing and interest rate decisions with the release of the minutes of their last meeting. We will also have employment data on Wednesday in the form of the UK claimant count change and unemployment rate. Both of these will be closely scrutinized given how important decisions on timing are for when UK interest rates will be increased. Any surprises will be expected to have a significant effect on sterling.
Interested in purchasing or selling sterling? Call your trader now for the latest rates, as it looks to hold on to Friday’s highs.