Pound sterling is currently mixed today. The pound is up against the US dollar and the Canadian dollar, while selling off against the euro, Australian dollar and the yen. While the pound sold off sharply last Thursday, it managed to strengthen on Friday, helping it recoup some of its earlier losses. In the past few weeks, Brexit-related announcements are having less of an impact on the currency. Instead, traders are more focused on domestic UK data and economic policy. This week, traders will be focused on Chancellor Philip Hammond's Spring Statement tomorrow. He is expected to announce a cut in borrowing thanks to the government's relatively strong finances. As progress relating to Brexit remains limited, traders are re-focusing on actual economic data instead of political news. Our short-term outlook on the pound is neutral, while our medium-term outlook is bullish.
GBP/USD is currently above 1.3860. EUR/GBP is up slightly, with the exchange rate above 0.8890. The pound is down against the Australian dollar and flat against the Canadian dollar. GBP/AUD is currently above 1.760, while GBP/CAD is above 1.7760.
Turning to UK economic data, this is an extremely light week for the currency. Given this week's light economic calendar, trading in the pound is likely to be dominated by international news headlines and risk sentiment. On Tuesday, Chancellor Philip Hammond will deliver his Spring Statement. Last week, UK services PMIs were better than expectations while house price data (Halifax house prices and RICS housing survey) were lower than estimates.
As the pound continues to strengthen, we are now bullish on the currency in the medium-term. The pound is now looking trading within normal conditions. This is based on a range of technical indicators looking at a weekly chart.