A positive afternoon for sterling saw it gain ground across the board following a tough start to the day. Purchasing Managers’ Index (PMI) data from the construction industry was reported very close to the expected value, rendering the data largely overlooked in early morning trading. Instead, sterling continued its recent poor form, following six straight days of losses against the US dollar. Sterling hit a two-and-a-half month low against the US dollar, although it did stage a rally throughout the afternoon to finish in a stronger position heading into Thursday.
Today we see the release of PMI data from the services industry. This looks set to be the most influential of this weeks’ PMI data, and investors will be eagerly awaiting this release – and deviations from expectations could cause significant movements in sterling markets. Aside from this, comments from the European Central Bank (ECB) President today are also liable to create significant market movement.