With the pound underperforming its major counterparts, GBP-traders fix their gaze on the UK CPIs in order to better asses the likelihood for a BoE hike as early as in May. Global indices rebounded on Monday, but investors remain cautious ahead of tomorrow’s US inflation data.
GBP-traders On the Edge of Their Seats in Anticipation of UK Inflation Data
The pound started the week on the back foot, underperforming all but one of its G10 peers on Monday. It traded virtually unchanged only against CAD. The main gainers were NOK, AUD and JPY in that order.
Although the currency strengthened last Thursday when the BoE signaled that interest rates are likely to be lifted earlier than previously anticipated, the joy of GBP-bulls did not last for long. On Friday, the currency came under massive selling interest following comments from EU’s chief negotiator Michael Barnier, who said that a Brexit transition period is not a given if the differences between the UK and the EU persist.
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