The cable is holding onto gains triggered by the replacement of the Chancellor of the Exchequer. US consumer confidence and Brexit will also be eyed today, an analyst at FXStreet Yohay Elam tells.
“Prime Minister Boris Johnson ran down the now former Chancellor of the Exchequer Sajid Javid, making way for Rishi Sunak. More importantly for sterling traders – the change paves the way for infrastructure spending, relieving the Bank of England of the need to provide monetary stimulus.”
“The reshuffle also provides a united front ahead of post-Brexit talks with the EU. Both sides have been posturing of late, with traders learning to ignore it. Official negotiations kick off in March and further rhetoric – reflecting the divide on regulatory alignment and other topics – may move the pound.”
“The US consumer may also lend its support to the greenback. Economists expect retail sales figures for January to continue rising. America's shopping spree has driven the economy forward. Later, the first read of the University of Michigan's Consumer Sentiment Index is set to remain at high levels near 100 – reflecting optimism.”
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