Sterling continued to remain steady yesterday after the MPC unsurprisingly left rates unchanged last week. Markets are relatively dovish on the Pound, with many institutions believing that we have seen the short term high for GBP/USD now. Many are questioning what form of easing the BoE will take next month? This week the markets will gain an insight into the Bank of England’s thought process, as the first solid July numbers are released from the UK, including UK CPI today.
Bank of England policy maker, Martin Weale gave the Pound a slight boost yesterday morning. Weale said that the BoE should not act because markets expect it to. “The Old Lady of Threadneedle Street is not a nurse to markets”. This hawkish comment gave Sterling a 0.8% push higher against the Greenback before returning to the open price.
It is another jam packed week in terms of economic data. The key event will be on Thursday when Mario Draghi steps into the spotlight. Draghi will attempt to settle the market’s nerves on Brexit, Italian banks and the continued weak state of the Eurozone economy, at this meeting. Today, UK CPI and German sentiment figures will be the main focus, followed by US housing data in the afternoon.