Sterling simply held its gains versus the euro in a very quiet week of trading, holding above 1.1640 for the week and primed for some incremental gains. This week is unlikely to be as quiet. Both central banks meet, whilst several important data releases sit on the calendar from PMI to employment.
Sterling enacted a technical retracement last week, as the dollar enjoyed some respite from its recent weakness. This week is littered with market moving news as both the Bank of England (BoE) and US Fed meet. Data-dependent central bankers are pushing back against a market that is becoming overexcited by the prospect of rate cuts on the horizon.
The euro retraced last week, owing to very weak German factory orders, very dovish rhetoric from European Central Bank member Isabel Schnabel (notable as she is a hawk) and a dollar bounce assisted by Friday’s Non-Farm payroll data beat. Both the ECB and Federal Reserve meet this week in a bumper week for top tier data!