Regarding the outlook for the pound ahead of key data this week, Paresh Davdra, CEO and Co-Founder of RationalFX has said:
“PMI data released today reveals a strong recovery for the Eurozone’s economy. Figures revealed a slowdown in the services, but robust expansion in manufacturing. The euro has made modest gains against peers in response, but analysts remain cautious ahead of Thursday’s long awaited ECB policy meeting.
The euro however has faced uncertainty in recent days, with the Catalonia situation putting pressure on the currency.
Sterling could face pressure however, following the suggestion from BoE deputy governor Sir Jon Cunliffe that a November interest rate rise was still an ‘open question’. Analysts have typically favoured the pound as the likelihood of a rate rise increases, and so any signals to the contrary could weigh on sterling. Investors will be watching closely to see how the pound reacts to both UK GDP data due for release this week and the ECB policy meeting. If the ECB meeting does indeed push the euro higher on Thursday, the pound could see a lot of movement in the coming days.”