The fact that Sterling sharply depreciated across the board on Tuesday, after British inflation rates unexpectedly dropped to 2.6% in June, continues to highlight how the currency has become increasingly sensitive to monetary policy speculation.
It’s quite interesting how Sterling remains resilient despite being constantly bombarded by political risk and economic woes over the past year. Last week’s awe-inspiring rebound, which was trigged by Bank of England Governor Mark Carney’s hawkish remarks, is a testament to this, as the Britsh pound/U.S. dollar currency pair concluded Q2 above 1.3000.
Central bankers will be the center of attention over the next couple of days, with a number of policymakers appearing, including Federal Reserve Chair Janet Yellen, ECB President Mario Draghi and the Bank of England Governor Mark Carney.