Traders who have placed bullish bets on the pound may find their nerves tested this week, with sterling likely to buffeted by everything from Brexit to the Bank of England.
Sterling posted its biggest weekly gain versus the dollar since June last week, benefiting from a falling dollar after dovish comments from Federal Reserve officials and ongoing tensions with North Korea. This week it faces a vote on the U.K.’s Brexit bill in Parliament on Monday, inflation data on Tuesday and the Bank of England rate decision on Sept. 14.
As the opposition Labour Party hopes to block the bill aimed at transferring European Union legislation into U.K. law, Prime Minister Theresa May will be relying on the Democratic Unionists and the loyalty of her own party to get it through. Seven of her Conservative Party lawmakers would have to vote against it for the bill to fail.