Busy week for the pound, will the Bank of England minutes throw up any surprises on Wednesday? (Mike Vaughan)

GBP EUR Exchange Rate: Weekly Review July 16  
Michael Vaughan
Michael Vaughan

Sterling has had a relatively low key start to the week shifting less than half a cent against most major currencies, the exception being the Australian Dollar that rallied from a low of 1.8746 to a high of 1.8621. Today was expected to be be quiet with the US bank holiday in remembrance of Martin Luther King jr.

Tomorrow sees a busy day from the Euros point of view with economic sentiment surveys from ZEW for the Euro Zone and will also see consumer confidence figures released late on from Australia, this will be followed by inflation data early Wednesday morning. Looking at areas to focus on for the pound and Wednesdays Bank of England minutes is set to dominate along with unemployment figures scheduled for 09:30. Should the minutes show any surprises, particularly regarding interest rates (did any of the nine MPC members vote for a rate hike in January?) then the pound could have a strong showing. Likewise the forecasted fall in unemployment figures from 7.4% to 7.3% should lend strength to the pound as it brings the target ever closer the 7% threshold that governor Mark Carney set last year before he would consider raising interest rates.

For me I still feel it will be Q4 at the very earliest and more likely 2015 before the bank considers raising interest rates, but I believe the pound could have a strong showing against a number of currencies on Wednesday.

To finish the week watch out for unemployment figures in the US Thursday afternoon along with Euro Zone consumer confidence.

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