The Great Britain pound has been a remarkable performer on the Forex market recently but lost its upward momentum during the end of the last week. Will the currency be able to resume its thrust to the upside or the period of strength has come to an end?
Fundamentals still look good for the currency, though not much economic data is expected this week. The most important event will be the Bank of England monetary policy meeting on July 10. Yet it is likely that the central bank will keep the monetary policy the same, and there is a high probability that the bank will not release a detailed policy statement, meaning that the policy decision will not sway the sterling in either direction. Still, the interest rate outlook remains favorable for the UK currency as market participants count on the central bank to start raising interest rates in not-so-distant future.
As for other news, a report on manufacturing production will be released today. Forecasters predict that it will show 0.4 percent growth for May, the same rate as in the preceding month.
Poundâs performance will likely be different against different peers. It is likely that the UK currency will struggle against the dollar as the US currency is also supported by expectations of tighter monetary policy relatively soon. This makes Forex Crunch be neutral on GPB/USD. The sterling has a better chance to rally against currencies with no support from an interest rate outlook, like the euro and the yen. The shared 18-nation currency is especially vulnerable due to negative interest rates implemented by the European Central Bank. Such considerations make DailyFX be bullish on the pound in general.
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