GBP: Doing well on and off the pitch – ING

FXStreet Insights Team FXStreet

If England reaching the Euro 2024 final wasn’t enough positive news, the UK posted stronger than expected growth numbers for May Thursday morning. The monthly GDP indicator rose 0.4% MoM, doubling expectations and showing a healthy rebound from April’s 0.0%, ING’s FX strategist Francesco Pesole notes.

GBP remains surprisingly bullish

“The impact on the Pound Sterling (GBP) from GDP data was muted, but GBP remains the best performing G10 currency this week, largely on the back of some hawkish narrative from Bank of England (BoE) speakers following a quiet period around the election.”

“We were not surprised to hear the two most hawkish MPC members, Jonathan Haskel and Catherine Mann, sound the alarm on risks of easing too early – but Chief Economist Huw Pill’s comments did matter to a greater extent, as he is a more accurate benchmark for consensus within the committee. Pill’s comments yesterday mostly stressed the persistence and upside risks in services inflation, shedding light on greater doubts about an August cut.”

“The market’s dovish bets have been trimmed, with now only 14bp priced in for the 1st August BoE meeting, and 47bp in total for the year. It will take some convincing developments in UK prices to convince markets an August cut is possible. That remains our base case anyway, so we believe that GBP strength will be short-lived. For now, EUR/GBP bulls like us will be happy with the pair not slipping below June’s 0.8400 lows.”

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD back to 1.3250, down modestly for the day

GBP/USD now comes under fresh downside pressure and recedes toward the mid-1.3200s on Tuesday, partially reversing the optimism seen at the beginning of the week. Meanwhile, Cable’s bearish tone follows the resumption of the upside traction in the Greenback, always amid the sharp rally in USD/JPY.

EUR/USD off tops, back to 1.1400

EUR/USD now loses some momentum and recedes from the area of recent daily tops, revisiting the 1.1400 neighbourhood in the latter part of Tuesday session. The pair’s daily decline comes in response to the resurgence of some buying interest in the US Dollar.

Gold clings to daily gains beyond $4,000

Following multi-month lows near $3,950, Gold now manages to regain some composure and reclaim the area beyond the key $4,000 yardstick per troy ounce on Wednesday. Still, any meaningful recovery appears limited as a broadly firmer US Dollar and rising US Treasury yields weigh on the yellow metal.

Ripple defends critical support, Stellar extends recovery

Ripple (XRP) trades around the key $1.00 psychological level, consolidating as the token awaits its next directional catalyst. Stellar (XLM) extends its recovery above $0.178 after posting modest gains at the start of this week.

Why a hawkish Bank of Japan could trigger the next Bitcoin sell-off

The Japanese Yen hits a 40-year low of 162.00 against the US Dollar, raising concerns about intervention or additional rate hikes by the Bank of Japan. BoJ may sell US Treasuries to buy back Yen, potentially pushing US bond yields higher and making Bitcoin less attractive to investors.

Kevin Warsh isn't expected to say much in Sintra: That's exactly why markets will listen

Financial markets could find an important catalyst in the enchanting, fairytale-like landscape of Sintra this week. The ECB Forum will, as it does every year, gather the crème de la crème of central banks. The new boss at the Fed, who has clearly said that the Fed should stop explaining everything, will need to talk – and traders should listen.