This week sees quite a bit of event risk for the pound. On Tuesday we have inflation numbers, which are quite important. The Bank of England Monetary Committee is starting to become a little split on interest rate moves. A high inflation figure would mean a higher chance of seeing an interest rate rise, which would buoy the Pound.
English & Spanish
The Pound has done pretty well of late. It is touching the 1.14 level in the Interbank market, and against a fairly weak USD we have managed to touch 1.30. Depending on the figures Sterling may continue to rise a little. However, don’t think this is setting a bullish trend. The feel for the Pound is still down. The uncertainty in the UK regarding Brexit, and the weak majority of the Government, will naturally continue to weigh on the currency
Sort term, is where we are likely to see a higher Pound. Against the Euro we cannot see beyond 1.15 at the moment. There is great technical resistance here, and to break this level would take quite a feat. The real mover for Sterling is against the USD. This is targeting 1.31, and may continue to go higher mainly because of a weak USD. The Euro has also benefitted against a weak USD, and has maintained a significant level above 1.14.
So, this week be careful of reaction after the figures. These are definitely going to be a big influence this week, and could shape the next major moves for the currency.
Have a good week!
The Premier FX Team.
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This article was updated on the 17th of July, 2017.