Pound Makes up for Losses Approaching 1.3000 to Dollar

The pound sterling is making up for losses ahead of the Bank of England’s rate meeting as it approaches $1.30 against the dollar, the highest it has been in eight months.

Markets Wait for BOE Report

The unexpected announcement by UK Prime Minister Theresa May to hold general elections on June 8, saw the pound gain 3.5 percent against the dollar and up 1.2 percent against the euro. Investors are waiting for the BOE report on the economy, in the inflation report and the monthly interest rate decision on “Super Thursday”.

Retail Sales

Data detailing the rise in Retail Sales, which is at its highest in 11 years was attributed to the timing of the Easter holiday and had little effect on currency traders.

Analysts at Intesa San Paulo believe that there will be a downwards revision to growth in the inflation report, which will make it harder for the Bank of England to raise interest rates.

Karen Jones at Commerzbank thinks the pound is likely to rise, rather than fall with a minimum target of 1.3140, she also thinks that against most models of fair value the pound in the long term is undervalued. The eventuality as she see it, is more likely on the upside.

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