Pound Sterling (GBP) Weekly Forecast: PM Race Hots up in Time for Heatwave

GBP/USD Daily ChartPound Sterling (GBP) Weekly Forecast: PM Race Hots up in Time for Heatwave

As the UK braces itself for a heatwave, the race for the next Prime Minister heats up ahead of TV debate. The top 5 contenders of Rishi Sunak, Liz Truss, Penny Mordaunt, Kemi Badenoch and Tom Tugendhat will partake in a debate on Friday at 7:30pm UK time. The race of 5 will be down to 2 on Thursday next week as the question of who will be the next PM, becomes clearer.

Pound Sterling has steadily trended lower despite the dollar recent surge, which suggests that we could be seeing a slowdown in the bearish narrative surrounding sterling. Surprisingly positive year on year GDP for May (3.5%) could very well be the reason for the pound’s resilience against the dollar. The euro however, appears to have staged somewhat of a comeback vs the pound while risks mount for the single market currency next week.

Next week we see a plethora of EU focused data with EU inflation, the ECB rate decision and the issue of uncertain Russian gas flows supposed to resume on Friday. Considering all of this, we could see volatility in EUR/GBP pick up towards the end of the week.

UK focused data appears via unemployment data followed by the unavoidable CPI inflation print which is expected to rise to 9.3% for June. The Bank of England still anticipates that inflation will hit double digits before peaking.

Pound Sterling (GBP) Weekly Forecast: PM Race Hots up in Time for Heatwave

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According to the latest Commitments of Trading (CoT) report by the CFTC, net sterling positioning actually dipped slightly as large speculators, hedge funds (often referred to as the ‘smart money) increased GBP shorts.

Pound Sterling (GBP) Weekly Forecast: PM Race Hots up in Time for Heatwave
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