Fundamental Forecast for GBP: Bullish
Sterling (GBP) Talking Points:
- Sterling making gains against a range of currencies, but the US dollar remains stubbornly strong.
- Big week of data releases and the latest Bank of England meeting.
The DailyFX Q3 GBP Forecast is available to download.
We recently turnedpositive on Sterling and our view has been hardened this week, helped by a more conciliatory tone surrounding Brexit negotiations and a decent technical bounce back from a mid-week dip in the British Pound. The roundly disliked Chequers plan is now looking like it is a non-starter, in its current form, while both the EU and the UK are leaning towards a Canada/Canada+ deal, an agreement that will ease concerns over future trade. Talks remain ongoing and will continue to provide wire services with a raft of headlines, so the usual Brexit-disclaimer remains in place.
The UK data and events calendar are busy next week with a slew of heavyweight data prints before the latest release from the Bank of England on Thursday. While UK interest rates are fully expected to remain unchanged for months to come, accompanying text from the MPC may provide some further economic clarity.
The data releases in the first half-of-the-week remain as important as ever and will need to be closely monitored. While Sterling is currently executing a Brexit-driven U-turn, any negative data releases will apply a brake to Sterling’s progress and keep bullish momentum in check in the short-term.
The comprehensive DailyFX Economic Calendar for the week ahead provides traders with updated data and forecasts across all major currencies. This week, DailyFX analyst Justin McQueen will be taking an in-depth look at these important UK data releases, Brexit and other UK asset market drivers on Monday at 10:30GMT at our weekly UK Key Events and Markets Webinar.
Traders may also like to take time to listen to DailyFX analyst Paul Robinson’s latest video on becoming a better, more consistent trader. As Paul notes early in his piece, ‘Markets are too dynamic, full of too much uncertainty, to try and navigate them without a framework in place. Trading plans are imperative for creating consistent results'.Becoming a Better Trader – How to Create a Trading Plan.
Sterling Weighted Index Daily Chart
--- Written by Nick Cawley, Analyst
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