The situation over the pound is aggravated by the ongoing disputes around Brexit since after the conservatives demanded that Theresa May promptly submit a draft agreement on secession from the European Union to the House of Commons. Thereafter, the labourists immediately declared that they would not support him if he will not take into account their position on this issue. Given that the negotiations between Theresa May and Jeremy Corbin ended in complete failure, it becomes clear that the draft agreement could arrange either Labor or the Conservatives since the parties could not find a compromise on a number of issues -but not both sides at the same time. So, whatever plan Teresa May suggests, it will still be blocked either by one or another party.
To be honest, the dollar bounce suggests itself not the first day and today, the common European currency is given a chance for revenge. The fact is that the final inflation data, which is published this afternoon, should confirm the fact of accelerating inflation in Europe from 1.4% to 1.7%. Such a rise in inflation will seriously inspire investors and they will resume purchases of the single European currency. Its growth will pull the pound along with it, however, unless someone again blurs something about Brexit. True, optimism will be somewhat limited by data on the construction sector of Europe, whose growth rates may slow down from 5.2% to 1.8% but this data is not as important as inflation data. Well, in the United States, no macroeconomic data are coming out today.
Thus, it is most likely that the single European currency will rise to 1.1200.
If British politicians again do not make loud statements, the pound has every chance to rise to 1.2850.