The pound initially opened last week’s session on stable footing as GBP investors welcomed Scotland’s lifting of its remaining coronavirus restrictions.
Disappointment over the announcement overshadowed the publication of some upbeat jobs figures, which revealed a surprise drop in unemployment and a sharp jump in wage growth in April.
Sterling then began to mount a recovery in the middle of the week, with the release of the UK’s consumer price index. May’s CPI figures reported domestic inflation rocketed up to 2.1%, putting it back within the Bank of England’s (BoE) target range and bolstering expectations the bank could start to tighten its monetary policy in the coming months.
However, the pound then fell off its best levels in the latter half of the week, after data showed a shock contraction in domestic retail sales last month.
Looking ahead, the spotlight for GBP investors will no doubt be the BoE’s latest policy meeting on Thursday. No policy changes are expected from the BoE this week, but analysts are predicting the bank will strike a more hawkish tone, which could help bolster the pound.
Also of note will be the UK’s latest PMI figures, will another month of robust growth in the UK’s private sector also lend some support to Sterling?
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)