Sterling faces its most significant recent threat when the Bank of England meets on Thursday lunchtime. Andrew Bailey and co struck an unexpectedly hawkish tone at the March meeting, making this decision very much a choice between a hold or a hike. Adding to the uncertainty are decisions from both the European Central Bank (ECB) and the Federal Reserve within the same 24-hour window.
It’s not just policymakers hogging the limelight this time around. A string of vital economic releases in the tail end of the week means the pound could move sharply against rival currencies.
Despite all the tumult, sterling held up well last week, strengthening by about half a cent against the US dollar on Friday and approaching its best level in a month against the euro.
Another baffling period was summed up on Friday by a leaked Pentagon report which suggested the United States could remove its support for British sovereignty over the Falkland Islands. A gunman then stormed the White House Correspondents’ dinner in Washington DC over the weeekend in an apparent attack on the Trump administration. King Charles is set to begin a four-day state visit to the United States today to mark 250 years since the nation’s independence.
Oil finished the week well clear of $100 per barrel despite the three-week ceasefire and hopes of fresh talks in Pakistan. Brent crude climbed by more than 10% last week amid the US naval blockade of the Strait of Hormuz, while tentative talks between the two sides ultimately yielded no progress.
Prosecutors from the US Justice Department announced they were dropping their controversial investigation into Federal Reserve chair Jay Powell on Friday. That move came after lawmakers (including some Republicans) said they could not approve his successor, Kevin Warsh, until the investigation ceased.
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