GBPEUR
Big picture: a meaningful escalation in the Middle East could drive oil prices higher, impacting both the UK and Europe as importers of energy. We don’t need to go back too far to see the deleterious impact on the euro caused by the natural gas price spike during the Russia/Ukraine initial conflict. This remains a ‘tail risk’ but is on our radar. Domestically, a plentiful UK economic data schedule will drive sterling sentiment this week.
GBPUSD
Geopolitical developments have remained front and centre of the market’s focus of late, but domestically the UK data release schedule is plentiful, with Bank of England speakers, unemployment data, CPI (inflation) and retail sales all released in the next five days. Not only will this drive sentiment for sterling moves, but it will help shape interest rate policy expectations of the BoE.
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