For one of the first times recently Sterling finished the week higher than it started, bringing an end to a trend of negative weeks. This week Sterling has jumped against the Euro off the back of optimism from Mark Carney, who suggested that there could be an interest rate hike in the UK this year.
Coming next week
There will be a relatively busy week for Sterling coming up, with the Inflation report and the NIESR GDP estimate. Both of these market conditions have come under pressure since the UK’s uncertainty surrounding Brexit. Inflation is growing at the fastest level in a long time and there could be major volatility this week if there is reports of further jumps. The Bank of England is mandated to keep inflation over 2% and they have now reached that level. However over the next few months it’s likely that inflation will rise to over 3%.
The National Institute of Economic and Social Research will release their latest GDP Estimates next week which once again could have a significant effect on the market. Whilst there has been concerns about the UK’s economy it has held strong over the last few months. The moment uncertainty starts to kick in Sterling could struggle.
Brexit Talks Focus
Now that there is Brexit discussions continuously going on in the background, the market conditions could change at any point. There is so much riding on a new trade deals for the UK that an announcement at any second could send the market into a frenzy. Whilst its unlikely to be in the near future, it may not be too long before Sterling moves into a positive trend.