Pound sterling is currently higher against all major currencies. The British pound is currently the strongest against the euro, the Australian dollar and the US dollar. Last week, the pound sold off after failing to hold on to gains following the Brexit transition announcement. The currency weakened alongside regional peers as the US dollar staged a comeback.
Turning to news, there are few notable developments relating to Brexit. Following the announcement of the transition deal, speculators are increasing their bets on the future appreciation of the pound. As we wrote this weekend, long positions in British pound futures and options are currently at a bullish extreme. Our short-term and medium-term outlook on the pound remains bullish.
GBP/USD is currently above 1.4040. EUR/GBP is down, with the exchange rate above 0.8760. The pound is up against the Australian dollar and up slightly against the Canadian dollar. GBP/AUD is currently above 1.8290, while GBP/CAD is above 1.810.
This is a fairly light week for economic data relating to the British pound. On Tuesday, we’ll see the BRC shop price index (January) and Markit manufacturing PMIs (March). On Wednesday, we’ll see construction PMIs for March. On Thursday, the most important day, we’ll see Markit services PMIs (March). Last week, the final-take of Q4 GDP growth (1.4%) met expectations.