The British pound hit another 26 year high despite softer house prices, leading indicators and an uneventful Bank of England interest rate decision. The strength of the British pound seems to really be coming from overall demand for high yielding currencies and distaste for the US dollar.
Unlike the Eurozone which has actually been reporting stronger economic data, the continual weakness of UK data raises the risk of a sharper slide in the GBP/USD should there be any bit of a dollar rally. Tomorrow we are expecting UK trade data, which is also expected to be weak, but US fundamentals will continue to dominate the currency pair’s price action.