Market report: uncertain week for the pound


The pound rebounded against the euro and dollar last week, but it might not be smooth sailing over the next few days. The Bank of England’s (BoE) Monetary Policy Committee (MPC) minutes are released on Thursday and with no clear indicator of which direction they’ll go on the ‘bank rate’, volatility looms.

The pound has recently been trading within a range, failing to break some key resistance points, so Thursday’s announcement may come at the right time. It could provide the spark for sterling to edge higher if the BoE take a hawkish stance and signal a rate hike in the near future.

Further to this, August traditionally suffers from low volumes as investors and market participants jet off on their holidays. This is likely to only exacerbate the volatility.

Uncertainty around a sudden drop in Covid cases in the UK – and a rise in cases globally – may only confuse investors more. But for now, UK cases are falling which should increase business and consumer confidence and boost the pound further.

Key announcements

09:00 – GBP – Final manufacturing PMI – Set to remain unchanged at 60.4

09:00 – EUR – Final manufacturing PMI – Set to remain unchanged at 62.6

15:00 – USD – ISM Manufacturing PMI – Forecast at 60.8 from previous 60.6