After rising earlier in today’s trading session the Pound has seen a sell-off this afternoon, and with quite a busy week planned this week in terms of economic data releases, I think the Pound could be in for further falls later this week.
The reason for the Pound’s gains last week can be put down to the Brexit plan now being clearer after the UK PM, Theresa May outlined her Brexit plans during a speech last Tuesday.
Furthermore, the GDP figure for the final quarter of 2016 was released last week, and it demonstrated that the UK is the fastest growing economy within the G7 group of countries.
When a currency rises quite steeply over a short period of time it’s usually at risk of seeing a sell-off at some stage due to profit taking by day-traders, which I think we can put down as a reason for part of the Pound’s sell-off this afternoon. Also this afternoon a EU figure, the EU’s Verhofstadt has announced that there will be no deal for the UK without EU parliament consent and this appears to have picked up the sell-off in the Pound.
This Thursday is likely to be busy for the Pound as the most recent Interest rate decision is due. Although no change is expected, any indications of future monetary policy by Mark Carney, the governor of the BoE, could create movement within the GBPCAD rate.
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