Sterling strength is reflecting less bad news than actual good news, analysts say MUFG Bank. They point out that next week UK data (inflation and employment) will be key for the Bank of England.
Notable Statements:
“Although the pound has performed well this year, this week’s data may have weighed on performance in the short term. The pound is the third worst performing G10 currency this week and yesterday’s data seems to be weighing a bit. on GBP now, with EUR/GBP drifting higher. EUR/GBP is up 0.7% this week and most of that gain has been since yesterday.”
“The GBP/USD break above the 1.2500 level, which has coincided with the EUR/USD break higher, is technically significant and in circumstances where US dollar sentiment remains With no change, there is certainly room for the move to extend to the upside, particularly given the lack of conviction behind the move evident in the IMM positioning data.”
“A weak data set next week that changes expectations for a Bank of England rate hike on May 11 could well undermine GBP performance, but it is more likely to be apparent against the EUR than the rest of the G10, as many central banks have already gone on hiatus and the curve in the US points to aggressive cuts later in the year.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
