After falling sharply last week, the British pound is trading sideways this morning. The pound fell last week following the Bank of England's 'dovish hike'. While the BoE raised interest rates by 0.25%, in line with expectations, the Bank dampened the outlook for future rate hikes. Markets had priced in more rate hikes in 2018, which are now looking less likely. The pound is weaker as a result. Now that the BoE event is in the rear view mirror, Brexit negotiations will once again dominate pound trading. We covered our views on the continuing uncertainty regarding the currency in a recent commentary.
GBP/USD is currently just above 1.3070. EUR/GBP is down slightly and the pair is currently trading above 0.8880. The pound is currently flat against both the Australian dollar and the Canadian dollar. GBP/AUD is above 1.7080, while GBP/CAD is just below 1.670.
Looking at the economic calendar for the pound this week, it includes retail sales, GDP estimates and industrial production figures. On Tuesday, we’ll see retail sales numbers and NIESR GDP growth estimates for October. On Thursday, we’ll see RICS Housing Price Balance survey data. Finally, on Friday we’ll see industrial production, manufacturing production and trade balances. Last week, the Bank of England hiked rates while dampening expectations of more rate cuts in the future.