It all started last week when the Tories all agreed to pass the EU Repeal Bill followed by positive Inflation data which hit its highest level in over 5 years. This then led to the Bank of England suggesting that an interest rate hike may be coming sooner than the markets currently expect. Prior to this the expectation was for the next rate hike to come in 2019 so last week’s 7-2 split caused a shift in the market expectation.

Bank of England Governor Mark Carney came out earlier this week to state that any interest rate hike, when it comes will be ‘limited and gradual’ which caused the Pound to stall, but we are now close to the 2 month high to buy Euros with Pounds.

Tomorrow, UK Prime Minister Theresa May is due to take centre stage to deliver her vision of a post-Brexit Britain. The speech which is due to be held in Florence could cause a huge amount of volatility so it is important to keep a close eye on the markets to see how they may react.

Personally, I think the tone will try and be as positive as possible whilst also trying to maintain a strong negotiating position but the next issue will be how will the other 27 EU member react?

Also, over the weekend the Germans hold their latest general election with current Chancellor Angela Merkel due to win a fourth successive term as leader of Europe’s strongest nation. If as expected she wins again this would typically result in Euro strength versus the Pound as it maintains the status-quo.