Pound sterling is mostly higher today - the British pound is trading higher against the Japanese yen, the US dollar and the euro, while selling off against the Australian dollar. The pound is flat against other major currencies. Last week, the pound ended the week higher despite rising trade tensions and a weakening euro. As traders price in a May rate hike while the currency remains significantly undervalued, the pound has performed relatively well in recent history.
Turning to news, we covered easing trade tensions in our US dollar daily update. In other news, more UK residents support holding a second referendum on the terms of a Brexit deal according to a recent YouGov poll. According to a Bloomberg report, 44% of are in favor of a vote while 36% are opposed. As Parliament is currently in recess, there have been limited Brexit-related updates in recent history. Our short-term outlook on the pound is neutral, while our medium-term outlook remains bullish.
GBP/USD is currently above 1.410. EUR/GBP is down, with the exchange rate above 0.870. The pound is down against the Australian dollar and up against the Canadian dollar. GBP/AUD is currently above 1.830, while GBP/CAD is above 1.80.
This is a fairly light week for economic data relating to the British pound. Tomorrow, we'll see BRC retail sales and hear a speech from MPC member Haldane. On Wednesday, the most important day, we'll see economic data including February industrial production, February manufacturing production and the February goods trade balance. On Thursday, we'll see the BoE credit conditions survey. Last week, services PMIs missed expectations by a significant margin.
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.