The British pound is strong and will probably be a lot stronger in coming days thanks to the sharp contrast between economic growth in the US and in the UK. Throughout the past 2 weeks, we have seen UK data surprise to the upside.
In the US however, there could be no bigger disappointment than the one we have seen today. As much as the UK will fall victim to a slowdown in the US, given the country?s current stability, the impact should be limited. In the week ahead, expect the British pound to be in play. House prices, PPI, the trade balance and employment data are due for release. These are potentially market moving numbers.
Written by Kathy Lien, Chief Currency Strategist of DailyFX.com