The pound held firm against the euro and dollar


On Wednesday, the pound held firm against the euro and dollar amidst a relatively light economic calendar. 

Sterling has found support from the past week’s Bank of England decision which was more hawkish than expected. Despite the recent banking uncertainty, the British banking system has remained stable, and as a result, the value of the British pound has benefited.

Sentiment for Sterling has improved, with Goldman Sachs announcing an upgrade to their Sterling forecasts. The bank acknowledged falling gas prices as contributing to a more upbeat growth outlook and closer UK-EU relations following the recent progress on a the Windsor Framework agreement. As a result, Goldman Sachs now sees GBP/EUR at 1.1364 for six months, up from 1.1100 previously. However, whilst Goldman Sachs has acknowledged the improving outlook for sterling, they have warned that it is too soon to be overly bullish on sterling’s prospects. According to the bank, they would become more bullish on the sterling if the Bank of England took a more aggressive policy stance.

Key announcements

13:00 – EUR – Harmonised Index of consumer prices (YoY) (Mar) consensus 7.5% against 9.3%
13:30 – USD – Gross Domestic Product Annualised (Q4) expected 2.7%