Sterling had a mixed day on Friday, rising to mid-February peaks against the euro, while the US dollar found support and forced sterling away from its recent multi-year highs.
The week ahead sees little in the way of economic data released from the UK, with the only major data released on Wednesday. Release of the unemployment rate kicks off the day and, after falling below 7% for the first time in 5 years recently, this is expected to continue to fall. The Bank of England (BOE) inflation report is also released on Wednesday, which may provide clues as to the BOE’s future plans regarding interest rates. Governor Carney also speaks on Wednesday and it will be interesting to see what he says on when interest rates will begin to rise following weekend news articles stating that this could happen as early as first quarter 2015. It is also likely to provide further clues to the central bank’s reaction to recent sterling strength.
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