After starting the week strong, the pound eventually squandered its huge lead to close the week behind the USD and JPY. It’s only win came over the debt-stricken EUR with the EURGBP slipping to 0.9012 from 0.9079. The GBPUSD, on the other hand, fell and closed at 1.5013 after reaching a high of 1.5383 from 1.5176. Similarly, the GBPJPY sunk to 135.93 from 137.86.
No economic reports were due in the UK last Friday. The pound, however, suffered a huge loss when India’s surprise interest rate hike sparked some speculation that the tightening measures that are starting to be implemented by the central banks in the world could constrain the global economic recovery.
Today (4:30 pm GMT), BOE Governor Mervyn King is set to speak at the Royal Society, in London. Being the head of the central bank, traders could then look into his speech for clues regarding the bank’s future monetary policies. Any hawkish statement could be bullish for the GBP.
Tomorrow, the UK’s annualized CPI for will be issued. The UK’s annualized headline CPI is seen to cool down a bit to 3.1% in February from 3.5%. The core version of the account is also seen to be at 3.0% from 3.1%. An interest rate hike or a removal of any of the BOE’s current stimulus programs would be less likely given a drop in the UK’s inflation figures. This, though, could be bearish for the GBP.
The UK’s BBA mortgage approvals and CBI realized retail sales will also be released during tomorrow. The latest number of new mortgage approved for home purchase is seen to be at 34,300. The UK’s CBI realized retail sales index, on the other hand, are seen to have dropped to 20 from 23 which indicates a slightly lower level of sales during the latest period.
On Wednesday, the UK’s annual budget balance will be published. The British government is not expected to cut on its deficit for this year. This will only put more pressure on the GBP given its already high outstanding debt.
The UK’s retail sales will be on tap on Thursday. Sales at a retail level are projected to have increased by 0.6% in February after sliding by 1.8% during the previous month. With the CBI retail sales index seen to have fallen, the UK’s actual retail figure could come in weaker than expected as well.