GBP weekly forecast

The Pound strengthened initially this week, buoyed by confirmation that growth in the UK’s manufacturing sector reached a two-year high last month.

An upbeat market sentiment further supported the increasingly risk-sensitive Sterling, enabling it to sustain a positive trajectory throughout the first half of the week.

Sterling started to decline in the latter half of the session after a survey from the Bank of England indicated a probable decrease in inflation over the next year, as UK businesses anticipated providing reduced wage hikes in the next 12 months.

Moving forward, the UK’s upcoming jobs report is expected to serve as a significant driver of movement for the Pound Euro exchange rate this week.

Such developments could prompt a retreat in Sterling should additional indications of a cooling labor market and decelerating wage growth fuel expectations for a Bank of England rate cut. Conversely, the Pound might strengthen if April’s data surpasses expectations.

Another factor that could impact GBP exchange rates is the UK election apprehensions, particularly with the expectation that the major political parties will imminently unveil their manifestos.

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