The Pound has remained pretty steady against most major currencies over the last week, in anticipation of this coming week. To recap, so far in 2018 the Bank of England have signaled they may look to hike interest rates again this year, Brexit talks are now becoming more serious, and UK data is being watched from all angles- especially UK inflation and wage data.

The volatility will kick off on Tuesday when the UK will release inflation figures, which is expected higher MoM, but lower YoY. This will be interesting as the BoE are watching inflation figures to determine when another interest hike will be necessary, another hike will be bullish for Sterling as an economy, but it is arguable whether this would be positive for the UK economy with so much uncertainty surrounding the UK economy currently.

The second event which should add some volatility into the mix will be UK jobless claims and wage data on Wednesday morning- the expectation so far is positive for these releases which could have a positive impact on Sterling exchange rates mid-week, for those of you looking to sell Sterling, this could provide some great opportunities. Of course, there is always a 50% chance that the data misses expectations and we could see the opposite reaction. The reason why Sterling would strengthen on higher wages is that if interest rates were to go up again, it means the UK consumers would still be able to afford their usual lifestyle and borrow money as normal thus the interest rate hike not having a negative effect on the UK economy.

Speaking of the Bank of England, on Thursday they will have their bi-monthly interest rate decision- now there is no change expected this month, however, the data releases before this event will give us an idea of how the Bank will react over the coming months, and the Governors speech should also give us direction. Thursday is also the day that the EU summit will begin, this is an extremely important event as Brexit will, of course, be the main talking point as the EU are expected to announce what the transition deal will be for the UK and whether or not the UK has permission to begin trade talks.

All in all, this is expected to be a very volatile week, we could find that all of the above prove to be non-events, but for now, it seems that if you are trading Sterling then it is wise to remain diligent over this week. If you have an upcoming transaction then Monday is the perfect day for us to speak about a strategy for this week, I have various options that can help with these volatile scenarios which will minimise your risk but still leave your upside open. Please feel free to email me or call me directly.