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Sterling took a pounding last week on the U.K. government’s slow coronavirus response. Does it have a chance to recover this time?

Flash PMI readings (Mar. 24, 10:30 am GMT)

  • Reading above 50.0 indicates industry expansion, below 50.0 reflects contraction
  • Manufacturing PMI expected to fall from 51.7 to 45.1 in March
  • Services PMI expected to drop from 53.2 to 45.0 in March
  • Weaker than expected results could mean even more GBP selling

U.K. inflation readings (Mar. 25, 10:30 am GMT)

  • Headline CPI to fall from 1.8% to 1.6% in Feb
  • Core CPI to dip from 1.6% to 1.5% in Feb
  • Producer input prices to slip by 2.0%, output prices to stay flat
  • Lower than expected figures could keep BOE easing expectations in play

BOE statement and MPC minutes (Mar. 26, 1:00 pm GMT)

  • No actual changes to interest rates at 0.10% expected
  • Central bank already delivered emergency cuts earlier in the month
  • No expected changes to asset purchase facility as well

Technical snapshot

  • Stochastic is showing a mixed picture of GBP pairs, although majority appear to be in bullish territory.
GBP Pairs Stochastic from MarketMilk
GBP Pairs Stochastic from MarketMilk
  • Moving averages also suggest a mixed long-term picture, with both GBP/AUD, EUR/GBP, and GBP/NZD looking most bullish.
GBP Pairs Moving Averages from MarketMilk
GBP Pairs Moving Averages from MarketMilk

Missed last week’s price action? Make sure you check out the GBP Weekly Review for Mar. 16 – 20!