Sterling endured a poor day yesterday as it fell across the board. However, this trend suddenly reversed against the US dollar with sterling gaining over a cent following the release of the latest minutes from the Federal Reserve’s Open Market Committee (FOMC). The minutes made it clear that any increase in US interest rates were unlikely to happen any time soon and would be undertaken in a considered manner as the FOMC were very concerned about the state of the world economy and the dampening effect it could have on the US economy.
A quiet day on the data front yesterday saw only Halifax housing inflation data released from the UK. This showed that UK house prices had increased by 0.6% throughout the past month which was above economists’ expectations. Today sees the Bank of England announce their latest decision on UK interest rates. Considering the disappointing economic data out of the UK recently, it is highly unlikely that we will see a change. Investors will be looking for any change of tone in the accompanying statement but caution seems to be the byword here just like in the US.