FX.co ★ Sterling Rises to Over 1-Week High

The British pound surged to over $1.336, reaching its highest level in more than a week, as investor sentiment grew positive in anticipation of significant UK economic figures and a pivotal political development with the EU. All eyes are on Thursday's preliminary PMI results, which are anticipated to reveal a less severe contraction in manufacturing and a modest downturn in services. Inflation for April is predicted to rise to 3.3%, marking the highest rate in 14 months, while core CPI is expected to reach 3.6%. Additionally, retail sales are forecasted to increase by 0.4%, extending a four-month period of growth despite sensitive consumer conditions. Boosting the pound's value was the historic agreement between the UK and EU to redefine post-Brexit relations, encompassing collaborations in energy, defense, and mutual fishing rights until 2038. Conversely, the US dollar faced downward pressure following a surprise downgrade of the US government’s credit rating by Moody’s, driven by concerns over escalating debt.