The falling GBP has already been bolstered by excellent growth reported from the services sector. Monday saw a 1% rise in the GBP against the USD thanks to this positive indicator. This week will include some events that are bound to shake matters up still further.

The BRC Retail Sales monitor figures are out on Monday the 4th of August. As with July, which showed a gain of 1.4%, respectable growth is forecast. This seems likely to make the pound more robust, reflecting the rising confidence in the retail sector. If this trend continues, it would seem as though the pound is definitely on the up.

Manufacturing Production figures have been weaker than predicted and have shown recent significant declines. However, the predictions for the release of this figure are rosy, and if the predicted 0.9% rise is realized, we’re looking at still more strength for the pound, while US figures remain disappointing.

The steady UK GDP estimate (released monthly) seems to indicate economic stability in the year to date and presages still more support for the GBP in forex markets should this stability prove as sustainable as it has been so far.

The BOE inflation report on Wednesday may cause some volatility. The world will certainly be watching, and reactions will depend, both on the report itself, and on BOE governor, Mike Carney’s subsequent comments in the scheduled press conference. Wednesday is definitely a day to watch!

The UK trade balance continues to show deficits, and this month is expected to be no exception. It makes sense that deficits in the range of 8.4 billion pounds monthly are not sustainable in the long term. It’s the one threatening cloud on the horizon for the GBP, and it will be interesting to see how policy makers strategize around it.

In the medium to longer term, the GBP still looks like a strong currency, showing fairly predictable results. Despite poor performance against the Euro recently, it looks set to bounce back owing to Europe’s various economic setbacks. The GBP may not be the currency for those who like ‘thrills and spills’, but it’s a pretty safe haven at the moment and seems likely to continue along the same lines. At the same time, models show the USD to be likely to gain ground against the GBP in what’s left of 2013, and if these predictions are fulfilled, the dollar will be the way to go.

The pound has been rallying after recent setbacks, but despite these gains, USD investors remain bullish, since the British economy is certainly struggling in certain respects. If the figures released in the coming week are not as strong as hoped for, it seems very likely that the dollar will cash in on the pound’s weakness.

Despite speculation that the Bank of England would intervene with more support for the pound, it was decided that no more ‘Quantitative Easing’ would be initiated, so the pounds’ pretty much on its own now. Strong economic results that have been pretty much as predicted presage a little more predictability in the currency.