Surprisingly enough, sterling surged to the top spot last week thanks to positive Brexit remarks from German Chancellor Merkel. What’s coming up next?
Just as in the previous week, there are no major U.K. economic reports that the pound can turn to, leaving Brexit updates as the likely driving factor in the days ahead.
Negotiations have still been pretty tense as Tusk rejected PM Johnson’s request to remove the backstop demand, but optimism picked up when Merkel suggested that a solution could be possible in the next 30 days.
Although she clarified later on that she simply meant to highlight the urgency of the situation, this just goes to show that it ain’t over ’til it’s over for pound bulls. Didn’t Trump just dangle a potential trade deal with the U.K. over the weekend? Anything can happen!
Overall market sentiment
As in the previous week, the pound might also stay extra sensitive to risk sentiment and counter currency action in the days ahead.
Trade tensions between the U.S. and China are still under the spotlight, especially with Trump officially declaring the end of the tariffs truce and the next batch of measures due to be implemented by September 1.
Missed last week’s price action? Read the GBP price recap for August 19 – 23!