British pound posts minor losses last week
The British pound (FXB) appreciated 0.66% against the US dollar (UUP) for the week ending March 16. The pound (GBB) closed for the week at 1.394 as compared to a close of 1.385 in the previous week. There weren’t any major economic data reports from the UK last week, but a weaker euro led to increased demand for the British currency.
British equity markets (BWX) were impacted by increased concerns about global trade wars and closed lower last week. The FTSE 100 Index (EWU) was down 0.84% for the week ending March 16 and closed at 7,164.14.
Speculators decrease bullish positions
As per the latest commitment of traders report, released on March 16 by the Chicago Futures Trading Commission (or CFTC), speculators have increased their overall bullish positions by 2,763 contracts in the previous week. The total outstanding net long contracts increased from 5,264 contracts to 8,027 contracts as of March 13.
The week ahead for the British pound
This week is filled with events and economic data releases that could drive the British pound’s volatility higher. The most important event is the EU summit on Thursday and Friday, where they could look at cementing a Brexit transition deal with the EU. As per recent news reports, there could be a deal at this meeting, which could have a positive impact on the British pound. The Bank of England is also scheduled to meet this week, but no major changes are expected after a surprisingly hawkish statement at the last meeting. Overall, a transition deal, if accepted by both sides, could lead to the appreciation of the British pound this week. In the next part of this series, we’ll analyze the price action of the Japanese yen in an uncertain political and economic environment.