The British Pound advanced against the Euro, Dollar and other major currencies mid-week following the release of hotter-than-expected UK inflation numbers, but the key focus for FX markets remains tonight's Federal Reserve event which could trigger more durable moves.
The focus for the British Pound in the coming week includes a Monday call by the UK government on whether or not to fully relax Covid restrictions on June 21 followed by a slew of economic data releases due on Tuesday, Wednesday and Friday.
A deterioration in relations between the EU and UK will form the focus over coming days amidst whispers of a potential trade war between the two sides breaking out over a failure to reach agreement on implementing the Northern Ireland protocol.
Increased UK-EU political tensions are said by a number of foreign exchange analysts to be weighing on the British Pound, but expect relief should any U.S.-lead diplomacy over the issue help bring about an ultimate compromise.
UK Covid-19 cases continue to rise rapidly with cases doubling nearly every ten days according to the latest data, but news that hospitalisations are flat and all adults will be offered a vaccine by month end are limiting any major losses in value for the British Pound.