British pound bounced back last week
The British pound (FXB) appreciated 0.93% against the US dollar (UUP) in the week ended November 24, 2017. The pound (GBB) closed the week at 1.3337, surging to a one month high after news that British Prime Minister Teresa May was expected to increase the Brexit bill offer. There were no follow-up developments regarding the removal of May by her own party, which was another positive for the pound last week.
Speculators turned bearish on British pound
According to the latest Commitment of Traders (or COT) report released on November 27, 2017, by the Chicago Futures Trading Commission, speculators have moved closer to bullish territory on the British pound. The total outstanding net positions were 300 short contracts compared to 4,533 short contracts the previous week. Further improvement in the Brexit talks and some help from economic data could take speculator positions back to bullish territory this week.
Week ahead for the British pound
Next week, the United Kingdom reports its manufacturing performance, and the markets expect a positive reading for the manufacturing index. Apart from economic data, the US dollar weakness and any positive developments with respect to Brexit talks could drive the British pound higher this week.
In the next part of this series, we’ll look at the sharp rally in the Japanese yen last week.