The British currency, unable to capitalise on strong early gains, lost ground against the euro yesterday, as an easing of risk appetite wore heavily on the fragile pound.
- Initially, sterling extended Tuesday’s rebound following a surprising jump in UK consumer sentiment, posting its biggest monthly boost in more than 14 years and signalling growing optimism about the UK economy.
- Additionally, the pound found support from signals that the Bank of England may not cut its bank reserves deposit rate anytime soon.
- In the afternoon however the pound gave up its gains, as weak US data brushed off on equity markets and sent the pound back down to a close of 1.0915.
- In trading this morning though, the single currency has slipped back on speculation that finance ministers and central bankers will discuss the euro’s strength at a G7 meeting later this week.
- Manufacturing data is due in the UK today at 09:30, with forecasts predicting a return to expansion in the industry, which may offer the pound some support.