FX Weekly Insights 05/03/23

The Windsor Framework's ability to restore government in NI and repair the economy of one of the least developed regions in the UK hangs in the balance, the Bank of England put the brakes on a positive story for the pound. Governor Andrew Bailey's criticisms of market expectations for interest rates quickly eroded gains from earlier this week, as inflation seems less persistent in the UK than in Europe and the US. Cable is being driven by a stronger USD as investors price in greater expectations for a rate hike by the Fed in the wake of stronger economic data.