A slow start to the data calendar this week means the pound is still meandering along the course which was set by the Federal Reserve last week. Outlaying their surprisingly hawkish stance, the dollar gained across the board and continues to hold the stronger position. GBPUSD is currently trading well below levels seen over recent weeks, with the June high of 1.4250 now a distant memory. Sterling opens the week just treading water above the 1.38 mark, with the Bank of England’s Monetary Policy Committee meeting Thursday to set interest rates for the next period.
Pound traders will be hoping the MPC follow suit of their American counterparts and give an optimistic view of the months that lay ahead for the UK economy. With all Covid restrictions due to end in July in England, the outlook should be clear for the central bank to have a bullish outlook. However, this remains to be speculation until Thursday.
Back in Brexit news, the UK is due to ask for an extension to chilled meat exports to Northern Ireland until the end of September. Having already extended the grace period after the January breakaway, the teams will be back to the drawing board. With the text written into international law, the BBC report that both sides are struggling to make the agreement work in principle. Meetings are being scheduled with further talks on the matter, but with the EU previously threatening legal action on the UK, tensions could rise.
Have a great day.
Jack Nicholls, Relationship Manager.
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