This morning there will be a string of important data with Average Earnings and Unemployment data. There isn’t expected to be much change from the previous results however with Sterling on the rise there could be opportunity for multi month highs to be reached if the data beats expectations.
There is some optimism appearing for the pound with Manufacturing data proving strong, it certainly appears the worst-case scenario many predicted following the Brexit vote is going to come to fruition. UK data will be a key indicator over the next year with future growth very much dependent on how the economy performs now. The International Monetary Fund have continued to cut UK growth forecast over the last year however with global growth for 2018 predicted to be around 4% there could be scope for improvement, especially with manufacturing performing at recent highs.
Brexit talks play key role
There are some thoughts that the Brexit talks could start to improve over the next few months with clarity being a key driver for Sterling. Should there be some obvious and clear progress then investors should have confidence in returning funds to Sterling, providing the currency to gain against major currencies. There has already been significant positive movement against the US Dollar with gains against the Euro coming slowly.
Barclays Bank are forecasting the GBP/USD to be up near 1.50 by the end of 2018 and the GBP/EUR rate is expected to move up to nearer the 1.20 level which would be the first time in well over a year. What this does suggest is that anybody who is looking to buy Sterling might be inclined to act sooner rather than later. The general trend is that Sterling will start to make in roads and should the Brexit talks remove uncertainty that could happen sooner rather than later.