The Pound ended Friday slightly lower having retraced the gains it made earlier on last week. Boosted by robust UK retail sales and a swing in favor of the "Stay in" EU campaign, sterling rallied to its best weekly performance in seven months.
Gertjan Vlieghe, an external member of the Monetary Policy Committee (MPC), signaled that he would vote for more stimulus even if the UK voted to remain in the EU next month and he did not see "convincing evidence" of a rapid improvement in the economy. Suggesting that the short term uncertainty around the Brexit has proven to be a drag on growth in the UK with the Bank of England expecting the UK economy to expand by just 0.3% in the three months to June, from 0.4% in the first three months of the year.
Last week also signaled much positivity in the US dollar stemming from hawkish comments from the Federal Reserve who gave a strong indication of a rate hike in June. The greenback rallied against most currency pairs, with the dollar index positing much needed positive gains.
Greece is set to vote on new reforms to adopt fresh cuts and tax hikes. Naturally, with the country already under austerity measures, the vote was not well received with wide spread protests across Greece. The current vote is all part of an initiative to boost fiscal reforms and offset borrowings against GDP. This will encourage the IMF to offer favourable lending terms to allow for much needed debt relief.
Rational Foreign Exchange Ltd trading as RationalFX is registered in England & Wales (Company number: 05385999) – Level 32, One Canada Square, Canary Wharf, London, E14 5AB.
RationalFX is authorised by the Financial Conduct Authority (FRN: 507958) under the Payment Services Regulations 2009, for the provision of payment services.
Issued by HM Revenue & Customs (HMRC) Rational Foreign Exchange Ltd trading as RationalFX is a registered Money Service Business (MSB) – Money Laundering Regulation number: 12206957.