The British pound experienced a notable surge, reaching its highest level in over a week and approaching its seven-month peak. This upward movement is fueled by positive sentiment surrounding a new UK-EU agreement and anticipation of upcoming UK economic data releases, while also being supported by a weakening US dollar.
- The British pound rose above $1.336, its highest in over a week.
- It’s nearing the seven-month high of $1.34 reached in April.
- The UK and EU reached an agreement to reset post-Brexit relations, including cooperation on energy, defense, and reciprocal fishing rights through 2038.
- Thursday’s flash PMI figures are anticipated to show a reduced contraction in manufacturing and services.
- April inflation is forecast to rise to 3.3%, the highest in 14 months.
- Core CPI may hit 3.6%.
- Retail sales are projected to increase by 0.4%, marking a fourth consecutive month of gains.
- The US dollar weakened after Moody’s downgraded the US government’s credit rating.
The confluence of a landmark political agreement and optimistic economic forecasts paints a positive outlook for the British pound. The market is reacting favorably to improved relations with the EU and expectations of stronger economic performance, suggesting potential for continued upward momentum. Weakness in the US dollar further reinforces the pound’s relative strength.