• Fireworks, as expected, last week Thursday with the GBP strengthening to 0.8284 before ending the day 1% weaker against the EUR

  • Will the pound have another attempt at reaching pre-Brexit levels?

  • Calm waters expected until US inflation data on Thursday

  • Hoping to see something that wasn't included? Get in touch!

Economic Calendar:


09:00 EUR Various ECB speeches

13:30 USD CPI

13:30 USD Initial jobless claims


07:00 GBP GDP

07:00 GBP Industrial production

07:00 GBP Manufacturing production


07:00 GBP Average earnings

07:00 GBP Claimant Count

07:00 GBP Unemployment Rate

10:00 EUR GDP

13:30 USD PPI



Last week we highlighted the significance of the UK and European rate announcements, and the EURGBP currency moves on the day did not disappoint. The EURGBP pair touched lows of 0.8284 following the surprise hawkish stance by the Bank of England. 4 of 9 voting policy members voted in favour of an increase to 0.75%, in turn raising expectations of future interest rate hikes. However, previously renowned for their dovish rhetoric, the ECB also came out more hawkish than expected. The GBP reversed its prior gains, to close the day 1% weaker against the EUR. In the chart below we spoke about the significant level the EURGBP pair was trading at - a 5.5 year low. An important inflection point for the GBP to either continue its strength and see pre-Brexit levels, or to bounce weaker resuming to its prior trading range. The 0.83 level held and the pair is now hovering around the 0.84 area. On the upside 0.855 is likely to keep the cap on any further GBP weakness, however, below 0.83 we can expect the prior GBP strength to resume and to potentially once again see pre-Brexit levels.


Although slightly stronger vs. the USD over the past week, the GBPUSD pair continues to bounce around in a very tight range, currently trading at 1.3540.

1.38 is keeping the lid on the upside, while 1.33 continues to offer support. On Thursday we have US inflation numbers, as well as UK GDP and production numbers Friday morning. These economic data prints may be the catalyst to spark a new trend change. Political news aside, calm waters are expected until Thursday afternoon.

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