Sterling On Pause Until Sentiment Improves
Market analysts have suggested there is unlikely to be a substantial break higher in the British Pound unless the market becomes convinced the medium-term outlook for the UK economy improves dramatically. There is also an expectation that the 2022 interest rate rise at the Bank of England has more or less been priced by the market and for a move higher, markets must see higher interest rates beyond 2022.
In level terms, GBP/USD has opened around the 1.3720 having not moved much from yesterday’s trading, GBP/EUR also trades in similar areas around the 1.1670 whilst EUR/USD continues to float at the mid of 1.17 – 1.18.
Data wise, a quieter day having had a busy start to the week with German ifo Business climate data having already been released and coming in slightly lower than expectations. US data is also due in the form of Core Durable Goods Orders and Crude Oil Inventories out later today. All have been highlighted as non market movers so directional bias is still expected to be driven by geopolitical issues and the sentiment around the Covid related issues.