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Can Sterling end the week on the front foot?

Currencies Direct February 21st 2014 - 2 minute read

This week we have seen the UK's inflation rate, measured by the consumer prices index, fall to 1.9% in January. The rate fell below the Bank of England's expected 2% level for the first time in over four years. The fall has eased pressure on the Bank of England over its decision to raise interest rates and risk choking off the recovery. Inflation as measured by the Retail Prices Index rose to 2.8% from 2.7% in December.

The number of people out of work in the UK fell by 125,000 in the three months to December, according to the latest estimations. The rate of unemployment now stands at 7.2%, this means overall employment is now at more than 30 million people based in the UK — an increase of 0.6% on last year.

Business growth in the Eurozone eased off slightly in February, the latest Eurozone (PMI) fell to 52.7 from 52.9 in January. However, the economy has continued to grow at a healthy pace. In Germany, strong demand meant that companies saw activity and new orders grow at the fastest pace since June 2011, while job creation was at the fastest rate since January 2012. But in France, the rate of decline in business activity picked up, with firms continuing to cut jobs.

Yesterday we saw an indication that China's manufacturing sector had contracted for the second month on the bounce. The initial HSBC PMI survey for the sector fell to 48.3 from January's marker of 49.5. February's levels were the lowest for more than half a year, adding to concerns about the lasting strength of China's economy.

Today, we have more UK data being released which could cap off a pretty good week for GBP. UK Retail Sales are expected to have declined by 1% in January, which is not as bad as it sounds when you consider the huge rise in December that exceeded expectations. Other economic data out today includes the Canadian CPI data followed by US existing home sales.

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Currencies Direct

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