After touching a 2021 low last week, sterling managed to bounce back and claw back against the dollar. Touching just north of 1.3410, GBP-USD last recorded this level prior to Christmas last year, when Brexit concerns were still lingering up to the final deadline with Europe, and the UK had announced another Covid induced lockdown, this time throughout the Christmas period. Over the tail end of the week GBP-EUR gained by over 1.3% however has not managed to hold above the key 1.17 psychological level.
The data calendar is looking light this week for the pound, giving little for traders to be excited about and to keep the exchange rate gaining further. On the other hand, the Bank of England have accelerated the gains for the unloved pound. With hopes of the UK being one of the first economies to increase interest rates following the Covid pandemic emergency measures, the pound should raise against peers as investors look to move their assets. Also Thursday’s announcement, which came from the Office for National Statistics, estimated a better than originally expected GDP growth for the UK. All positive news which adds fuel to the fire for an increase in interest rates from the central bank.
As with every first Friday of the month, the US will announce Non-Farm Payroll data. Showing the number of new jobs created in the economy, excluding agriculture, the release is always a highlight within the FX calendar. Dollar buyers will be hoping for a worse than expected release to continue to drive the recent gains back towards the 1.40 level.
Have a great weekend.
Jack Nicholls, Senior Relationship Manager.
Whilst every effort is made to ensure the information published here is accurate, you should confirm the latest exchange rates with WorldFirst prior to making a decision. The information published is general in nature only and does not consider your personal objectives, financial situation or particular needs. Full disclaimer available here.