GBPUSD exchange rates have remained strong above 1.40, while the GBPEUR exchange rate has remained range bound between 1.12-1.13. Following weaker than expected Retail sales data from the UK on Friday, the market showed no real reaction, which indicates that investors are looking for other indicators aside from Retail sales to assess the UK economy before they make their next moves.
This week will be pretty important for Sterling exchange rates as there is a lot of data and BoE speeches happening throughout the week, beginning with BoE Governor, Mark Carney speaking on Monday. At this point we do not know what he will be talking about, but this will be his first speech since the last interest rate decision where he indicated that a rate hike could be coming sooner rather than later, we will be watching this for any indication as to how this will be decided, what data to look out for, and his assessment of the UK economy at the moment.
The next day of importance will be Wednesday when we will see German and Eurozone manufacturing and services data releases (All expected weak)- if this comes out as expected then we could see the GBPEUR rise following these releases. This strength will be decided half an hour later when UK jobs data will be released, we are not expected any change in this release, but due to the rising inflation in the UK, jobs, and wages is very important so any weakness in this area could have a negative effect on the Pound. Later on, Wednesday afternoon members of the BoE including Carney will be speaking, similar to what I mentioned about Monday’s speech, it will be a high priority so this will be an important release to keep your eye on. The last data release on Wednesday of importance will be the FOMC Meeting minutes, as the Fed has indicated they may go for more interest rate hikes than expected in 2018, markets will be waiting for this release for more clarity, which could have an effect on the Dollar.
Finally, on Thursday, the UK will release GDP figures (Expected at 1.5%), we are not expecting any change here, but any deviation from this figure could have a big effect on the Pound.
The Pound has been pretty volatile this year but on the uptrend- data releases will be a big indicator for the Pound, but as always, Brexit will be the overriding factor until the UK is outside of the EU- so with all of the above, please keep in mind that Brexit headlines can completely reverse any effects data can have on the exchange rates.