[vc_row][vc_column][vc_column_text]Sterling continued to fluctuate against the majority of its peers last week as markets reacted to the latest UK data and Bank of England (BoE) rate speculation.

The pound is pushing higher at the start of this week, with GBP/EUR climbing to €1.1390 and GBP/USD rocketing up to US$1.4063.

Sterling may look to find more stability this week however as markets are hoping for more Brexit clarity following a successful meeting between Theresa May and her cabinet last week.

Pound volatile as data disappoints, BoE rate speculation rise
The pound was hit by volatility again last week due to some disappointing economic data and rising speculation of a BoE rate hike.

Sterling initially struggled to make any headway at the start of last week’s session as the EU’s, Guy Verhofstadt warned that the UK’s plans to reduce rights for EU citizens would make it impossible for the EU to agree to any special deal in trade.

GBP then rallied on Tuesday as investors welcomed a report suggesting that the European Parliament would support granting the UK ‘privileged’ access to the single market.

However these gains were quickly undone as the ONS reported an unexpected rise in the UK’s unemployment rate at the start of the year.

Sterling’s attempts to recover were then cut short again as the UK saw its fourth quarter growth downgraded from 0.5% to 0.4% on Thursday.

The pound didn’t stay down for longer however, with the UK currency jumping towards the end of the week on rising bets that the BoE is targeting a possible rate hike in May.

This speculation appears to have persisted into this week as well, with the pound benefiting from some remarks from the BoE’s Sir David Ramsden, who stated that he sees rates rising ‘sooner rather than somewhat later.’

However, the uptick in GBP may run out of steam towards the end of this week’s session should the UK’s latest PMI figures show that private sector activity continued to slow in February.

Lacklustre economic data punishes euro
The euro was forced to cede some of its recent gains last week as investors were unimpressed with the latest economic data to come out of the Eurozone.

The euro got off to a rough start last week as investors shied away from the single currency, instead eying a possible resurgence in the US dollar.

Many investors took the position that EUR may have been overbought in recent weeks, leading them to reduce their positions in the euro.

Economic data also did little to spur any lift in the single currency last week, following a sharp drop in consumer confidence and more modest growth in the Eurozone’s private sector.

The euro was able to find some respite in the second half of the week however, when the European Central Bank (ECB) published the minutes from its latest policy meeting.

While the minutes highlighted the bank’s fears over the recent weakness in the US dollar, they were still supportive of EUR as they revealed that many within the bank wanted to drop the ECB’s bias towards monetary easing.

Looking ahead, movement in the euro this week is likely to be dominated by the upcoming elections in Italy, with the continuing political uncertainty possibly weighing on the single currency.

Any losses may then be further extended by the release of the Eurozone’s latest CPI figures, with economists forecasting that headline inflation will have slipped again this month.

To request an instant quotation on a currency quotation please click here
* Information courtesy of Currencies Direct, Philip McHugh
The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Currencies Direct cannot be held responsible for any loss or damages arising from any action taken following consideration of this information. This article was written by Currencies Direct.[/vc_column_text][/vc_column][/vc_row]