© Dukascopy Bank SA
In the beginning of the week, the pair showed some signs of hope, however, almost immediately started to perform a moderate decline reaching its lowest weekly point in the middle of Wednesday. Traders started to sell the pound heavily on Tuesday, since the UK CPI data failed to help sterling trim losses driven by the explosions in Brussels, and the pound remained more than 100 pips lower on the day. The inflation reading came in slightly worse than expected, posting 0.3% growth in February, the same pace as in January and slightly lower than the initial forecast of 0.4% growth. The next day, Sterling took another hit after the Brussels attack fueled fears about terrorist attacks and immigration, pushing the probability of a successful Brexit referendum higher. Investors' main concern regarding the pound is the fear of the UK leaving the European Union in the June referendum, resulting in significant weakening of the country's economy and currency. Therefore, any information showing the UK is closer to leaving the Euro Zone is pushing cable down. At the end of the week, the pair managed to climb into the green zone as the latest retail sales data surprisingly showed upbeat figures, however, Brexit fears remain the main mover for the next couple of weeks. Eventually pair closed the observed period, reaching 1.4153 on Friday.
Community members do not expect any surprises from the currency pair this week, as according to the Dukascopy survey the Sterling might end the week at 1.41, slightly changed from the last week's close price. The majority of those polled (53%) share a bearish outlook for the UK currency. The UK is to release revised data on fourth quarter growth, as well as figures on the current account and net lending on Thursday as well as the data on manufacturing activity.
© Dukascopy Bank SA