Monday 24 October 2016 7:33 am

Sterling falls again on ECB tapering talk

Sterling got the week off to a bad start, sliding against both the euro and the dollar in early trading.

The pound was down 0.1 per cent against the euro at €1.1225, and down 0.2 per cent against the dollar at $1.2207 ahead of the opening bell.

That was despite the euro falling to its weakest against the dollar since March during trading on Friday after European Central Bank chief Mario Draghi played down suggestions the bank may be considering tapering its vast quantitative easing programme. 

Meanwhile, the dollar strengthened after data put the chances of the US Federal Reserve increasing interest rates in December at almost 70 per cent

However, a raft of data coming out of the Eurozone today could change the pound's fortunes. France, Germany and the Eurozone are all set to release purchasing managers' indexes which are expected to show little or no increase in activity in both the services and manufacturing sectors. 

Later this week, the Office for National Statistics will publish a preliminary estimate of GDP growth in the three months to the end of September, which is expected to show growth moderated to 0.4 per cent quarter-on-quarter.

Although consumer spending is likely to be strong, business investment is expected to fall. 

"It looks highly probable that consumer spending was the key growth driver as consumers still benefited from largely favourable fundamentals," said Howard Archer, chief European and UK economist at IHS Markit.

Now read: Brexit doesn't mean the end of the City