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Pound Edges Up Against Euro

Sterling edged up this morning, extending its winning streak against the euro for a sixth straight day after enjoying a boost from last week’s better-than-expected manufacturing and trade data.

The pound was up over 0.3 percent against the dollar and steady against the euro which has been hit by nerves around a pickup in political uncertainty in Europe and the ongoing standoff in Greek bailout talks.

We’re looking for the pound to trade relatively well in the near term with upside against the euro in particular.

There’s a lot of political risk coming up in Europe with elections in France and later in the Netherlands, Germany and Italy and after the unexpected results from Brexit and the U.S. elections last year, the market has learned to become a little more nervous ahead of those events.

Investors will be watching the release of British inflation and retail data this week to see how sentiment is holding up and whether an expected weakness in December was temporary or the start of a weakening trend for consumer spending ahead.

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