GBP soft as markets digest dovish BoE comments – Scotiabank
|The Pound Sterling (GBP) is soft, down 0.3% against the US Dollar (USD) and underperforming most of the G10 currencies into Wednesday’s NA session, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret note.
Multi-month bull trend is looking exhausted
"Comments from BoE MPC member Taylor, a minority dove who last voted for a 25bpt cut as the majority voted to hold, have highlighted concerns about the UK’s ability to achieve a soft landing and downside risks to inflation that could require additional easing."
"Rates markets are pricing in about 56bpts of easing by year end, down adding about 15bpts over the last month or so. Markets are pricing a 90% chance of a cut for the next BoE meeting on August 7. The multi-month bull trend is looking somewhat exhausted following a period of negative divergence in which the momentum indicators failed to confirm the fresh highs in spot."
"GBP/USD has struggled above anticipated resistance in the mid-1.37s. We continue to highlight the importance of medium-term support at the 50 day MA (1.3462) and anticipate a near-term range bound between 1.3650 support and 1.3750/1.3780 resistance."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.