The Pound received a very welcome boost last week following comments that ‘some withdrawal of stimulus was likely to be appropriate over the coming months’ by Bank of England Governor Mark Carney and the Monetary Policy Committee member who was previously maybe the most dovish on interest rates, Gertjan Vlieghe. This certainly helped to solidify the comments and Sterling’s value which rose dramatically. Sterling has retreated ever so slightly today as investors have wound up bets this morning on both the Dollar and Euro from last week.

Economic data this week

This week the British consumer comes into focus as UK Retail Sales figures will be released on Wednesday. This is followed by Public Sector Net Borrowing figures that will be released on Thursday. Following last week’s interest rate news I would expect these economic releases to carry further importance and could create large swings in Sterling’s value if these are different from what is expected. A slight drop is expected in these figures but these are definitely two events to watch closely.

Sterling value for the rest of the week

The important focus this week will be on Theresa May’s speech scheduled for Friday. She is likely to address the Brexit negotiations that have been postponed to the week of September 25th.

Some of leading companies based in the UK have written a letter to the Confederation of British Industry (CBI) asking for a year 3 year transitional deal to protect the jobs in Britain and Europe. If Theresa May confirms this I wouldn’t be surprised to see Sterling’s value increase again.

It’s worth noting that previous speeches regarding Brexit have helped to strengthen Sterling’s value. In my opinion, I would expect Sterling to remain at current levels, 1.13 versus the Euro and 1.35 against the US Dollar as markets prepare for Friday.