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Weekly Roundup: Pound see-saws amidst lull in notable data

currency-newsWeekly Roundup: Pound see-saws amidst lull in notable data
The pound opened last week’s session on the back foot, with the currency stumbling in response to dovish comments from Bank of England (BoE) Governor Andrew Bailey.

When asked about the possibility of another interest rate in May, Bailey warned that the situation in Ukraine and lingering Covid complications means that any future hikes are highly uncertain.

Optimism over Ukraine-Russia peace talks then allowed Sterling to quickly recapture a good portion of these losses.

However, this uptick in GBP exchange rates proved short-lived, with fading hopes for a negotiated end to the conflict in Ukraine and a lull in UK economic data left the pound without any strong directional bias in mid-week trade.

Sterling attempted another rally with the release of the UK’s latest GDP figures, after the final estimate for the last quarter of 2021 saw growth revised up from 1% to 1.3%.

But these gains proved fleeting as well, with the pound faltering again at the end of the week as ‘Bleak Friday’ -the day in which dozens of price rises for household bills came into effect- thrust the UK’s cost-of-living crisis was back into the spotlight.

Turning to this week’s session, a lull in high-impact UK data could see the pound struggle to attract support this week, particularly if this leaves GBP investors to remain focused on the impact the rising cost of living could have on the UK economy.

Sterling is also likely to remain sensitive to events in Ukraine, with GBP exchange rates likely to weaken if peace talks begin to stall again.

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