The most important reports that could have a direct impact on the pound's performance will be released on Thursday, January 15. These include GDP data for November, the NIESR estimate of economic growth for December, as well as November figures for industrial production and the trade balance.

No major surprises are expected. PMI indices continued to rise for the seventh consecutive month in November. Although growth momentum slowed slightly in December, the indices remained in positive territory. On the positive side, new orders in the services sector resumed growth, lending resilience to the economy. At the same time, employment has been declining for the fifteenth consecutive month, which does not fully align with the overall increase in sector activity. Another notable trend is rising pressure on average wages, which should help reduce persistently high inflation over time. Conversely, a sharp increase in costs in December is supporting inflationary pressures.

These inconsistencies do not yet provide a clear picture of the UK economy's underlying condition. If inflation continues to ease and the Bank of England gradually cuts interest rates, government bond yields could decline over the course of the year. This scenario currently appears to be the base case, which, at first glance, would limit the pound's ability to develop a long-term, sustainable bullish trend.

However, there is another risk of an external nature. In early February, Trump is expected to announce the name of Powell's successor as Fed Chair, and this is likely to be a candidate advocating monetary easing—at a minimum, faster rate cuts. Such a scenario is quite plausible and could lead to higher US Treasury yields, at least due to an increased risk premium. Liquidity would decline and volatility would rise. This trend would likely spill over into other markets, including the UK, and the pound would probably struggle to avoid weakening—especially if the Bank of England begins to consider restarting asset purchases to support liquidity.

It is clear that this scenario remains hypothetical at this stage, but it is difficult to predict how the investigation against Powell will ultimately unfold. US Treasury Secretary Scott Bessent has warned Trump that the investigation could have negative consequences for investor confidence and the economy as a whole. For now, we assume that pressure on the Federal Reserve is weakening the dollar and supporting the pound in the short term. However, further shocks with unpredictable consequences are almost certainly ahead. The aggressive policies of the US president could ultimately backfire, potentially accelerating de-dollarization and posing risks to the entire existing global currency system.

Net short positioning in the pound declined slightly over the reporting week to –$2.6 billion. Despite the UK having secured significantly more favorable trade terms with the US than the euro area, speculative investors continue to hold short positions in the pound, unlike in the euro. The calculated price has lost upside momentum but remains above its long-term average.

A week earlier, we expected the pound to build on its gains and test resistance at 1.3620–1.3640. This has not yet occurred, as the corrective pullback has been somewhat prolonged. Nevertheless, the 1.3620–1.3640 target remains valid. The probability of renewed growth remains higher than that of the correction developing into a full-fledged bearish trend. Dollar strength this week has been driven more by political factors than economic ones, and the pound still has a solid chance to resume its upward move.