RationalFX: Sterling managed to gain a weekly advance against the euro but failed to gain momentum against the dollar as the US currency remained pretty dominant in the global market.
Sterling’s mixed performance during last week suggests investors are still not convinced that the pound is ready to stop its current decline in the wake of the Bank of England’s November policy earlier this month.
GBP/USD fell to new eleven months lows. While the bounce back from GBP/EUR is not enough to suggest that sterling is about to enter a stage of major strength, in the coming week we may see the pound build on a recovery if UK employment and inflation data come in ahead of expectations.
The pound also benefitted from comments from Lord Frost at the end of last week. He noted a change in tone in the Brexit discussions with both sides appearing to be more committed to finding a solution for the Northern Ireland border issue.
Markets will be keeping an eye on the pound on Wednesday when the UK’s inflation data for October is released, hoping that CPI inflation can rise to 3.9% year on year which would be an increase from September release of 3.1%.
US Empire State Manufacturing Index
Source : ETFWorld.co.uk