Sterling Momentum Softens

Lior Alkalay - Contributor - Forex

In our last review on the Pound Sterling, we noted that the currency had been weak amid a soft patch in the UK economy. The pace of GDP Growth was slowing and unemployment was no longer falling, yet the robust retail sales figure had provided a bright spot for Sterling bulls. While growth momentum has continued to slow, it has remained fair, and with massive easing coming from across the Channel, i.e. the ECB’s QE program, Sterling was able to gain ground vs its European peer. Yet, with the BoE meeting looming next week, and the release of the February inflation report and Mark Carney’s follow speech, there is growing speculation that the BoE may open the door for a possible retreat, or perhaps even a U-Turn, in its plans for rate hikes. What is that speculation based on and how could it impact the Pound Sterling? Continue reading "Sterling Momentum Softens"