The Pound Sterling in focus this week
The pound hit the buffers at the 1.3440 today, just prior to the manufacturing data release which was a miss for April (the second consecutive monthly miss). With manufacturing being the third largest economic sector it can cause an impact on the overall expectations for GDP growth.
The UK’s goods trade balance widened faster than was expected too, and with the construction sector coming up short on data expectations, it was no wonder the Pound spiked lower to 1.3348 on the release before settling around the 1.3365 level at the time of writing.
But the real jitters are due to a host of further data releases coming later in the week, including key employment data, inflation related data, RPI and PPI and retail sales. Plus the UK Prime Minister Theresa May faces a series of votes in the House of Commons on the 12th June on whether to approve 15 Brexit amendments inserted into the EU Withdrawal Bill. If the Government loses one of the key votes it could pave the way for parliament to have a ‘meaningful’ say in the final Brexit deal, and thus potentially leading to a ‘soft’ Brexit.
Plus of course, we have the Fed interest rate decision to look forward to on Wednesday.
Therefore, I would expect many GBP institutional traders to be sitting on the sidelines this week.