Sterling rose against the euro during Asian trade; this move is still continuing this morning helped by an improvement in UK consumer sentiment. Sterling has fallen versus the dollar in trade dominated by month-end fixings and nerves around central bank meetings next week.
A survey showed British consumer confidence unexpectedly improved in October as people grew less nervous about their own finances despite a gloomy economic outlook.
Compound this with a high GDP figure and the picture for the UK economy at the moment seems pretty bright. Austerity measures have yet to be felt however and some currency analysts have predicted that once they do come in the economy could suffer well into the medium term.
“It has been a good week for sterling and it is doing well against the euro, but for cable the moves are mainly dollar-driven with U.S. news overshadowing anything sterling specific,” said Ankita Dudani, currency strategist at RBS.
The European Central Bank and the Bank of England also have rate decisions next Thursday, while there is also the month’s major U.S. data in non-farm payrolls.
