It’s been yet another roller-coaster week for the UK and the British pound. The pound rallied strongly against the euro, US dollar and other currencies after BoE Governor Mark Carney suggested interest rates could rise if business investment grows during the latter part of the week.
The chart below tracks the movement of sterling against the US dollar for the month of June and makes for fascinating viewing.
GBP/EUR failed to finish the week above the €1.1400 level. The pair traded within 2% from highs of €1.140 to lows of €1.126. GBP/USD traded within a 3% range last week with lows at $1.2703 and highs of $1.3030. Friday saw current account data from the UK come in at -16.9B which was an improvement against the forecast figure of -17.2B.
Looking to the week ahead, we have the release of some key data which could bring influence to bear on sterling.
We have the release of manufacturing, construction and services Purchasing Manager Indices (PMI) on Monday, Tuesday and Wednesday respectively of this week which are expected to be steady. Also on Tuesday we have the release of the last BoE meeting minutes which will be very carefully scrutinized given the conflicting statements from senior member of the BoE team and the closeness of the vote – five to three voted in favour keeping interest rates on hold – at the last meeting which was totally unexpected. Late on in the week we have the release of manufacturing production data.