Forex: Sterling gains as market expects hawkish outlook from this week’s inflationary data

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The British pound has began the week on a strong note, gaining in today’s sessions from an Asian session open of 1.6217 against the Dollar to climb some 90+ pips on the day to a 2 week high of 1.6313. The market is in anticipation of UK inflationary data that is scheduled to be released from the Bank of England later in the week; early signs of which show they may be in favor of the GBP. Should the inflationary data come out with a hawkish outlook; investors believe they may see the British pound sore past the 1.6300 level and towards the one year high of 1.6343 that was recorded towards the end of last month.

 

Against the Euro the British pound strengthened to see the EURGBP pair drop from an open of 0.8737 to a day’s low of 0.8696, however late European and early US session have seen the Sterling drop back on some of its gains as the Euro was boosted on from a slightly hawkish speech by European Central Bank President Jean Claude Trichet.