A similar story to last week as we enter a new week with the pound opening today on the backside. Now trading in the 1.16′ and 1.22′ against the Euro and the Dollar respectively.
Following last week’s pessimistic Bank of England outlook, the UK is potentially facing double-digit inflation and a recession through early 2023. Traders around the world struggled to see the value of the British pound, which has led to the sell-off that we currently see possibility of further rate hikes throughout the year. On the other hand, the Fed is much more bullish with further hikes planned for the last semester. Nonfarm payrolls figures released Friday in the United States also showed strong growth in the job market within the states.
Today’s and tomorrow’s economic calendar offers little to the British pound to relieve the current selloff. Wednesday will see US inflation data, which the Fed has already talked about and mentioned that it expects to take inflation as an average over a multi-year period. On Thursday, the UK will release a host of manufacturing and production data – currency buyers are hoping for positive news to reverse the current trend.
Have a nice day.
Author: Jack Nicholls, Senior Relationship Manager.
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