The pound failed to establish a direction last week. Attempts at growth that began after yet another statement from Trump about the willingness to reach a peace agreement were blocked after the US launched new strikes against targets in Iran, while Iran announced that it was not ready to compromise on its peaceful nuclear program.

There has been a lack of macroeconomic data that can shed light on the state of the British economy or the Bank of England's plans. The latest CBI retail survey showed that sales volumes in May remained extremely low, highlighting the persistent weakness in consumer spending. On Tuesday, the BoE will publish data on mortgage and consumer lending for April. It is expected that these will confirm the trend of declining borrowing, driven by an overall decrease in demand.

Currently, we rely on calculations from NIESR, which suggest that, even in the most optimistic scenario, the UK inflation shock will be prolonged, with inflation confidently remaining above 3%, depriving the BoE of the opportunity to lower interest rates. Accordingly, the economy will face additional pressure.

This week, significantly more attention will be given to US data, particularly the updated ISM indices and nonfarm payrolls for May. After the US GDP data for the first quarter was revised downwards, and stock indices continue to set records despite this, the risk of a correction is increasing.

The net short position on GBP has decreased slightly over the reporting week to -5.2 billion, with speculative positioning bearish and the calculated price remaining below the long-term average, with no signs of a pivot.

The pound is trading within a sideways range as part of a correction after hitting a local low of 1.3299, providing no grounds for an acceleration in growth. We still expect the correction to complete and another downward impulse towards 1.3299 to form.