Even though the British pound hit a new 26 year high today, it collapsed sharply on the back of much weaker than expected trade numbers and overall liquidation out of high yielders
We warned yesterday that given the lack of strong UK data to back the recent rise, any sign of weakness would lead to a sharper slide in the GBP/USD than the EUR/USD which was exactly what happened today. Next week the British pound will continue to be in play with inflation, labor market and retail sales numbers on the calendar. Inflation is expected to be strong and the labor market is expected to hold steady, but retail sales could suffer.