Important data releases dictate Sterlings movements

It’s been another volatile week in the currency market largely being driven by various data releases across the globe. The UK posted both CPI and retail figures earlier this week which both came in much better than expected. Inflation figures posted at 1.8% which is a great deal closer to the Bank of England’s target rate of 2.0% which should ease expectations of an interest rate cut at the Bank of England for now. Retail figures also posted a strong January as shoppers hit the high street and although a increase was expected from the poor -0.8% the 1.6% figure recorded yesterday had very little impact and was unable to give Sterling a boost to claw back its losses on the euro and dollar throughout the day.

The pound has started to lose momentum on both the euro and the dollar in the past 48 hours and more releases today should see whether sterling can get back to its impressive gains of 2020 or continue on slippery slope seen in these past couple of days. PMI data is due to be released this morning at 9.30am and should a positive figure be posted then we could see some stability for the pound and a potential rally against the majors but should a negative figure be released then we could see further woes for Sterling.