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Opposing factors were in play for pound pairs last week, but bears ultimately won out as the U.K. currency ended near the bottom of the heap. Can this week’s catalysts spur a recovery?

Industry PMI readings (starting July 2, 8:30 am GMT)

These purchasing managers indices are often seen as leading indicators for growth since businesses base their adjustments on their outlook for the economy. With that, PMI readings give traders strong hints on how order volumes, inventories, and hiring conditions could fare in the coming months.

Among the three PMI readings due this week, the services sector figure could carry the strongest weight since this industry accounts for majority of overall economic activity. This is due on Wednesday’s London session, and analysts expect to see a dip from 54.0 to 53.9.

Meanwhile, since the manufacturing PMI is first up, it tends to serve as a preview of how the latter releases might turn out. Analysts expect to see this figure drop from 54.4 to 54.1 to reflect a slower pace of expansion. The construction PMI is slated to tick higher from 52.5 to 52.6.

BOE Guv’nah Carney’s speech (July 5, 10:00 am GMT)

Remarks from BOE MPC members caused some tossing and turning for the pound last week, so head honcho Carney’s testimony could also spur big moves.

In his latest speeches, Carney focused mostly on financial stability risks, and his upcoming one could be on more or less the same topic since it’s scheduled a couple of days after the FPC minutes are released.

Last Week’s Price Review

The pound is on course to closing out the week in second-to-last place (as of 2 pm GMT), which would mark the second week of net losses for the pound.

Overlay of GBP Pairs: 1-Hour Forex Chart
Overlay of GBP Pairs: 1-Hour Forex Chart

The pound actually had a somewhat promising start on Monday. There were no apparent catalysts, but as noted in Monday’s London session recap, it’s possible the pound’s rise was a sympathy move since the euro was also on the rise at the time.

Other market analyst, meanwhile, suggested preemptive positioning and/or short covering by GBP bears ahead of U.K. data on Friday and the E.U. summit.

At any rate, a pound rally didn’t really materialize and GBP pairs (except GBP/NZD) even began tilting broadly lower on Tuesday, thanks to incoming BOE MPC Member Jonathan Haskel’s testimony.

You see, Haskel will replace outgoing BOE superhawk Ian McCafferty come September. However, Haskel revealed in his testimony that he’s much more cautious than McCafferty, which lowers the odds for future rate hikes.

Anyhow, the pound became a bit mixed after that before resuming its broad-based slide on Wednesday. And as noted in Wednesday’s London session recap, there weren’t really any major negative catalysts. However, market analysts were blaming the pound’s slide on weaker rate hike expectations because of incoming BOE MPC Member Haskel’s comments on Tuesday.

The pound’s slide was extended on Thursday. Again, there were no apparent negative catalysts, so Haskel was once again blamed for the pound’s slide, although some market analysts also pointed to weak expectations that there will be progress on Brexit during the E.U. Summit.

The pound’s bleeding finally stopped when Thursday’s U.S. session rolled around, thanks to hawkish remarks from BOE Chief Economist Andy Haldane. Other than that, short covering by GBP pairs ahead of U.K. data on Friday is also a possible reason for the pound’s recovery.

In any case, the pound began trading roughly sideways after that, before getting a bullish injection across the board during Friday’s London session. And as pointed out in Friday’s London session recap, that was due to a bunch of mostly positive U.K. economic data, with the U.K.’s upgraded Q1 GDP report and better-than-expected services index, in particular, being cited by market analysts as supposedly helping to raise expectations for an August BOE rate hike.

The pound’s gains were capped, though, probably because of Brexit-related jitters since E.U. top Brexit negotiator Michel Barnier had this to say shortly after the economic reports were released:

“On Brexit we have made progress but huge and serious divergences remain in particular on Ireland and Northern Ireland.”