British Pound Rally Comes to an End
After moving higher for five days straight, the British pound’s rally has finally come to an end.
There was no UK economic data released today which means that the move was driven almost entirely by dollar weakness. We continue to expect the British pound to remain firm next week with the minutes from the latest Bank of England monetary policy meeting due for release along with retail sales. The Quarterly Inflation Report released earlier this week was hawkish so we suspect that the vote to cut rates at the last meeting was a close one. As for consumer spending, the tight labor market and rise in BRC retail sales suggests that consumer spending will rebound after falling 0.4 percent last month.