GBP is outperforming with modest gain – Scotiabank
|The Pound Sterling (GBP) is up 0.2% against the US Dollar (USD) and outperforming all of the G10 currencies as markets respond to the release of stronger than expected employment data.
GBP is supported by employment surprise
"The 3M/3M employment change surprised to the upside, reaching its highest level since September. The data offer support to the recent shift in rate expectations for the BoE, where a split voting pattern suggested a fragmentation in the market’s broad consensus for further easing."
"Yield spreads are steady, consolidating their recent jump. Meanwhile, the options market is continuing to erode the premium for protection against GBP weakness, trending toward the lower end of its range from July – around zero."
"The RSI is up and extending its recent push above 50 but remains at levels broadly considered to be neutral. The 50 day MA (1.3502) is in view, and could offer some potential resistance – given its role as a level of trend support in the Jan-July rally. Anticipated resistance is limited ahead of the upper 1.35s. We look to a near-term range bound between 1.3350 support and 1.3580 resistance."
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