The release of better-than-expected manufacturing production figures for October on Friday saw sterling recover some of the ground it had lost against the euro on Thursday. Despite this, the British currency struggled against the US dollar thanks to the release of the US non-farm payrolls data which vastly exceeded the forecast level. As a result of this, sterling fell to its lowest level in six-and-a-half months against the US dollar.
A relatively quiet week lies ahead for sterling, with limited UK economic data set to be released. Average earnings figures on Wednesday are expected to show an increase of 3.2% year on year, slightly better than the previous quarters figure. The unemployment rate is expected to be steady at 5.4%. Both figures provide a good indicator for the amount of slack in the UK economy. Aside from this, Bank of England (BoE) Governor Mark Carney will speak at a press conference on Thursday, along with other BoE policy makers. He is expected to discuss the recent quarterly inflation report, and any clues regarding interest rate changes will be eagerly awaited by investors – and could prove beneficial to the British currency.