- Lots of talk but no progress in Brexit negotiations.
- The UK data calendar is empty next week with only the Spring Budget Statement on tap.
- Sterling’s direction will be decided by the other side of any GBP pairs.
Fundamental Forecast for GBP: Neutral
We remain fully entrenched on the sidelines when looking at Sterling as Brexit talks continue with little in the way of any progress seen in the last few weeks. Last Friday UK PM Theresa May gave her highly-anticipated ‘Road to Brexit’ speech but any chance that this would help to unlock negotiations failed when the EU continued to ignore the UK list of demands and repeated their ‘Four Pillars’ mantra. Unless there is a firm shift from either side of the negotiating table, Sterling will remain rudderless.
The week ahead produces one of those very rare occasions, a data calendar free of UK numbers. The only event for Sterling traders to keep an eye out for is the UK Spring Budget statement on Tuesday at 12:30 GMT with Chancellor Philip Hammond likely to reveal an improvement in UK public finances but no tax changes or spending increases.
This UK data-free zone next week may heighten Sterling volatility with any GBP movement dictated by the other side of any Sterling crosses. In the US, President Trump’s steel and aluminum tariffs are stoking fears of a global trade war, denting the USD, while the EUR is still trying to decide if this Thursday’s ECB meeting was mildly hawkish or dovish. Sterling pairs may become volatile next week but GBP will have nothing to do with it.
EURGBP Price Chart Daily Timeframe (July 2017 – March 9, 2018)
--- Written by Nick Cawley, Analyst.
You can contact the author via email at firstname.lastname@example.org or via Twitter @nickcawley1.