The British pound held up exceptionally well despite broad dollar strength. With the lack of any meaningful economic data, the currency is riding on the coattails of yesterday?s hawkish monetary policy meeting minutes.
With the minutes alluding to the possibility of another interest rate hike in July or August, traders have reversed a good portion of their pound shorts. This reflects the increasing number of economists now calling for 6.00 percent rates by year end. That may be a bit optimistic given recent retail sales and inflation data. The only piece of UK data released today was the CBI Distributive Trades Survey for the month of May, which increased from +5 to +2. Tomorrow we have UK GDP due for release. There are no major changes expected to be made to the second release of first quarter GDP.