Yesterday’s high: $1.3181
Yesterday’s low: $1.3078
Pound Recovers against US Dollar on UK Cabinet Speculation
On Monday, the Pound was able to recover from its recent lows in reaction to mutterings that UK Prime Minister Theresa May could be planning a cabinet reshuffle.
As a way of reasserting her power following a weak Conservative Party Conference and speculation that she was being undermined by UK Foreign Secretary Boris Johnson, May could be shuffling her government in order to give Johnson a less prominent role.
As Johnson is an advocate for a ‘hard Brexit’, this speculation pleased Pound hawks.
Sterling was unable to sustain all its gains against the US Dollar however, as the ‘Greenback’ was supported by bets that the Federal Reserve will hike US interest rates again before 2018.
USD Outlook: UK Political News and US Inflation in Focus
The US Dollar may not drive GBP/USD movement for most of the week, unless comments from Fed officials or US President Donald Trump prove significant enough to cause volatility.
Instead, any developments in UK politics will drive the Pound. If UK Prime Minister Theresa May gives further hints of a cabinet reshuffle, the Pound could continue its recovery.
Failing that, the pair could see mostly volatile trade until Friday’s US Consumer Price Index (CPI) report is published.
09:30 UK Balance of Trade
09:30 UK Manufacturing and Industrial Production
19:00 US Fed Minutes
13:30 US Inflation Rate
13:30 US Retail Sales
15:00 US Michigan Consumer Sentiment
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