The market is closely watching the first week of Keir Starmer as UK Prime Minister, as there was no significant impact on sterling and gilts on election day, according to FX analyst Francesco Pesole from ING. Despite the quiet fiscal prospects in the UK, other factors such as French politics, US macroeconomics, and Bank of England (BoE) rate expectations are expected to drive Pound Sterling (GBP) in the near future.
One key focus for the market is the upcoming speeches by Bank of England (BoE) officials, following a period of silence leading up to the recent election. Jonathan Haskel, an external member with a hawkish stance, has already delivered his remarks, while Huw Pill and Catherine Mann, both known for their hawkish views, are scheduled to speak later in the week. These speeches are expected to provide insight into the BoE’s future monetary policy decisions, which could impact the value of the pound.
In terms of economic data, the UK calendar for the week includes the May GDP release on Thursday, with the June inflation report following in the next week. This week’s data is relatively quiet, but there are some downside risks for GBP/USD due to political instability in the EU. This uncertainty has delayed any potential return in EUR/GBP steadily above 0.8500, which could impact currency movements in the short term.
As the market continues to monitor the development of Keir Starmer’s leadership in the UK, attention will also be on external factors such as French politics, US macroeconomics, and BoE rate expectations. These factors will likely have a greater impact on Pound Sterling (GBP) than the current fiscal prospects in the UK. The upcoming speeches by BoE officials, including known hawks Jonathan Haskel, Huw Pill, and Catherine Mann, will provide further insight into future monetary policy decisions.
In addition to political and economic factors, the UK data calendar for the week includes the May GDP release, with the June inflation report scheduled for the following week. This week is relatively quiet in terms of economic data, but there are downside risks for GBP/USD due to spill-over effects from EU political uncertainty. This uncertainty has also delayed any potential return in EUR/GBP above 0.8500, which could impact currency movements in the short term.
Overall, the market is closely monitoring the first week of Keir Starmer’s leadership as UK Prime Minister, despite the lack of impact on sterling and gilts on election day. Other factors such as French politics, US macroeconomics, and BoE rate expectations will continue to be the main drivers for Pound Sterling (GBP) in the coming weeks. The speeches by BoE officials and upcoming economic data releases will provide further insight into the future direction of the UK economy and its impact on currency movements.
