The Bank of England upgraded growth forecasts last week and downgraded inflation forecasts – both marginally – and suggested that rate hikes may happen earlier than currently expected. An above forecast headline UK inflation print for January – 2.9% expected - would add credence to governor Mark Carney’s comments and help GBP regain some of its recent losses.
Other trading topics covered include –
- A return to 3% headline inflation would support GBP and bring a UK rate increase in May into focus.
- GBP and the FTSE broke their previous inverse correlation when markets collapsed last week. Will this relationship rekindle?
- Brexit negotiations are not going well and GBP may suffer if nothing is settled ahead of the EU Summit Meeting on March 22-23.
DailyFX has a vast amount of updated resources to help traders make more informed decisions. These include a fully updated Economic Calendar, Educational and Trading Guides and a recently released IG Client Sentiment Indicator.
--- Written by Nick Cawley, Analyst
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