Huitong Finance APP—— pound After experiencing the impact of a series of economic data, it shows its unique elasticity. Although the UK's rainy weather in April had a far greater impact on consumer spending than expected, the evidence of strong inflation and the news of the general election in July provided support for the pound. This paper will discuss the immediate market reaction and future trend forecast of sterling.
Immediate market reaction: flexible performance of sterling
The pound fell on Friday, but remained near a two month high overall. Figures released by the Office for National Statistics show that sales fell 2.3% in April, far less than the 0.4% drop expected by economists. However, the consumer confidence index shows the highest level since the end of 2021, which provides some support for the pound.
Technical analysis: support level and resistance level of sterling
The pound was flat at $1.2700 on Friday. Previously, Britain's inflation rate rose 2.3% in April, higher than the expected 2.1%. The British pound once traded at $1.2761. euro Against sterling It remained in a moderate rise range and closed at 0.8520.
Analysts' opinions of well-known institutions
David Stretcher, a strategist at Caxton, said that the market's response to inflation data was too strong and exceeded the actual level. Nevertheless, the pound has shown significant resilience and has prevented it from falling to pre inflation levels.
Market forecast: future trend of sterling
Investors have reduced the possibility of the Bank of England cutting interest rates in June to less than 10% from about 50% before the inflation data was released on Wednesday. The yield of two-year British government bonds GB2YT=RR is hitting the biggest weekly increase so far this year, which shows that the market's expectation of the direction of monetary policy has changed.
The sterling market has shown its elasticity after experiencing the dual impact of inflation data and election news. Although the pound may face some fluctuations in the short term, in the long run, the basic orientation of the British economy and the government's policy support may provide further support for the pound. Investors should pay close attention to the economic data and policy trends in the UK to grasp the best opportunity for sterling investment.
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