020 7898 0500Reduced expectations of a May rate hike have depreciated the pound since the end of last week. When HSBC announced it expected no further interest rate rises this year or next, it was reasonable to expect some significant moves in sterling. However, while it continued its slide against the dollar, the situation wasn’t quite as bad as it could have been. That it made gains against the euro is rather remarkable and perhaps the European Central Bank’s recent comments had something to do with it.
Regardless, the outlook for the British economy is not great at the moment and you do have to wonder what will happen to sterling as more economic data is released. The run up to 10 May, when the Monetary Policy Committee announces its interest rate decision, could see some huge volatility on the currency markets.
Today we have the mortgage approval and lending figures for March, as well as the Markit manufacturing purchasing managers’ index. The figure is expected to dip from 55.1 in March to 54.8 in April.
