British pound appreciated against the US dollar
The British pound (FXB) appreciated by 0.48% against the US dollar (UUP) in the week ending June 8, closing at 1.34. The reduction of risk aversion and a pause in the US dollar rally in the previous week pushed the British pound higher. A series of better-than-expected economic data like higher services and manufacturing PMI gave a boost to the British pound last week.
British equity markets (BWX) posted a third consecutive weekly loss in the last 11 weeks, reflecting the weak equity market sentiment in the European continent. The FTSE 100 Index (EWU) depreciated 0.27% for the week ending June 8 and closed at 7,681.07.
Speculators decreased bullish positions
As per the latest commitment of traders report, released on June 1 by the Chicago Futures Trading Commission (or CFTC), speculators decreased their overall bullish positions on the British pound (GBB) by 2,132 contracts in the previous week. The total outstanding net long contracts decreased from 9,477 contracts to 7,345 contracts as of June 5.
The week ahead for the British pound
Important economic data from the UK is scheduled to be released this week, but it’s unlikely to have a major impact on the currency as other global central bank actions are likely to dominate the foreign exchange markets this week. The key economic releases from Britain this week include the employment report on Tuesday, inflation data on Wednesday, and retail sales data on Thursday. Brexit negotiations could come back in focus as the EU summit on June 28—29 is approaching. Neither the UK politicians nor the cabinet have come to an understanding, leaving a lot of uncertainty surrounding the Brexit deal, which could limit any large appreciation of the pound.