The pound initially opened last week’s session on stable footing as GBP investors welcomed Scotland’s lifting of its remaining coronavirus restrictions.
While this weakness did not paint the most encouraging picture of the economic outlook investors took encouragement from December’s monthly growth data.
As the economy showed signs of picking back up in December, with growth of 0.3%, the Pound only saw limited losses in the wake of the gross domestic product report.
The surprise resignation of then-Chancellor Sajid Javid also helped to fuel demand for the Pound, with Downing Street looking set to exert even greater control over the upcoming budget.
GBP exchange rates could gain fresh ground on the back of January’s consumer price index data, with forecasts pointing towards the headline inflation rate picking up from 1.3% to 1.6%.
A higher level of inflationary pressure would give the Bank of England (BoE) less reason to cut interest rates in the near future, offering the Pound a leg up against its rivals.
Another solid monthly performance from the UK services PMI could also encourage demand for the Pound, with a strong positive reading set to reduce the odds of any potential first quarter growth contraction.
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)