(MENAFN- DailyFX) Talking Points:
In a relatively quiet week for UK economic data, sterling traders' attention will likely focus on the next round of Brexit talks that begin Monday. The data highlight will be the release of the final reading of UK Q2 GDP. Further out, there is a clear risk that the Bank of England will tighten monetary policy at its meeting on November 2. Fundamental Forecast for GBP: Neutral
Brexit talks restart Monday in the wake of UK Prime Minister Theresa May's long-awaited speech in Florence Friday, in which she offered no new concessions to the EU, failed to specify a sum of money the UK would pay the EU as part of a divorce bill and was generally vague on detail.
In response, the EU's chief negotiator Michel Barnier praised the 'constructive spirit of her comments but asked for more clarity a stance likely to be repeated when the negotiations resume on the UK's exit from the European Union.
Those talks will likely be the highlight of the coming weak, which is short of economic data. The only official data of note will be the final figures for second-quarter economic growth Friday, although the Confederation of British Industry will also publish its distributive trades survey Wednesday and GfK will report on UK consumer confidence Thursday.
While political uncertainty and sluggish economic growth might argue for a weaker British Pound, it seems unlikely to lose much of the gain made so far this year against the , largely because there is a clear risk that the Bank of England will tighten monetary policy at the November 2 meeting of its rate-setting monetary policy committee.
Chart: Daily Timeframe (2017 to Date)
While that meeting is still more than a month away there is no MPC gathering in October it is bound to become more and more of a focus for traders in the weeks to come. In the meantime, GBP/USD looks set to continue its recent move sideways.
--- Written by Martin Essex, Analyst and Editor
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