GBP: A much busier week for sterling – ING
|Pound Sterling (GBP) faces a much busier week. The highlight is Thursday's MPC meeting. But before then, we have the jobs/earnings figures tomorrow and then the August CPI release on Wednesday, ING's FX analyst Chris Turner notes.
GBP/USD might break above resistance at 1.3590/3600 this week
"Unless we see some surprise drop in employment and/or wages/services inflation, it looks like the Bank of England will continue the hawkish narrative it introduced at the August MPC meeting. This has resonated with investors, where the market only prices 8bp of rate cuts this year and a total of 40bp by next summer."
"The divergence in UK inflation from that of the eurozone and the US is quite rare, and one can argue now that the UK price data is far more important than the activity data in determining when the BoE is prepared to deliver the next leg in its easing cycle."
"Elsewhere, the travails of the UK Labour government have not dented appetites for the high-yielding pound. We think EUR/GBP looks comfortable in its 0.86-0.87 range, while GBP/USD could break above resistance at 1.3590/3600 this week if the Fed is sufficiently dovish."
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