Pound Sterling Weekly Fundamental Forecast: MixedRace for Prime Minister hots up alongside UK summer temperaturesEvent Risk for the Week: UK unemploy
Pound Sterling Weekly Fundamental Forecast: Mixed
- Race for Prime Minister hots up alongside UK summer temperatures
- Event Risk for the Week: UK unemployment, CPI Inflation
- Smart money sees potential for further GBP weakness
GBP/USD Daily Chart
Source: TradingView, prepared by Richard Snow
PM Race Hots up Alongside UK Summer Temperatures
As the UK braces itself for a heatwave, the race for the next Prime Minister heats up ahead of TV debate. The top 5 contenders of Rishi Sunak, Liz Truss, Penny Mordaunt, Kemi Badenoch and Tom Tugendhat will partake in a debate on Friday at 7:30pm UK time. The race of 5 will be down to 2 on Thursday next week as the question of who will be the next PM, becomes clearer.
Pound Sterling has steadily trended lower despite the dollar recent surge, which suggests that we could be seeing a slowdown in the bearish narrative surrounding sterling. Surprisingly positive year on year GDP for May (3.5%) could very well be the reason for the pound’s resilience against the dollar. The euro however, appears to have staged somewhat of a comeback vs the pound while risks mount for the single market currency next week.
High Importance Event Risk for the Next 7 Days
Next week we see a plethora of EU focused data with EU inflation, the ECB rate decision and the issue of uncertain Russian gas flows supposed to resume on Friday. Considering all of this, we could see volatility in EUR/GBP pick up towards the end of the week.
UK focused data appears via unemployment data followed by the unavoidable CPI inflation print which is expected to rise to 9.3% for June. The Bank of England still anticipates that inflation will hit double digits before peaking.
Customize and filter live economic data via our DaliyFX economic calendar
Smart Money Sees Potential for Further GBP Weakness
According to the latest Commitments of Trading (CoT) report by the CFTC, net sterling positioning actually dipped slightly as large speculators, hedge funds (often referred to as the ‘smart money) increased GBP shorts.
— Written by Richard Snow for DailyFX.com
Contact and follow Richard on Twitter: @RichardSnowFX
element inside the
element. This is probably not what you meant to do!Load your application’s JavaScript bundle inside the element instead.
www.dailyfx.com