Last week, higher-than-expected inflation and a series of positive data releases gave the pound a boost. Sterling is still strong against the euro this morning, trading near 20-month highs.
PMI data, which will provide an insight into how the UK economy is performing this month, as well as speeches from Bank of England officials will be watched closely by the markets. The outcome of these events could impact the pound.
The euro is suffering this morning due to restrictions imposed in Austria and the Netherlands following a rise in COVID-19 cases. There are worries that an increase of restrictions across the continent, coupled with high inflation and supply chain issues, could heavily hinder economic recovery.
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