GBP holds weekly gains despite modest pullback – Scotiabank

FXStreet Insights Team FXStreet

The Pound Sterling (GBP) trades slightly lower but retains most of its weekly gains as UK data show mixed industrial performance and a wider trade deficit. Attention now shifts to next week’s jobs, CPI, and the Bank of England meeting, with markets closely watching guidance on future easing, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

UK industrial and manufacturing data offer mixed signals

"The pound is soft, trading with a marginal 0.1% decline from Thursday’s close while holding on to most of its weekly (0.35%) gain vs. the USD."

"Friday’s domestic releases included a mixed set of industrial and manufacturing production releases, with a modest surprise in the former outshined by a slightly greater disappointment in the latter. UK trade figures revealed a wider than expected trade deficit, albeit one that was highly impacted by the price of precious metals. The ex-metals balance surprised to the upside coming in with narrower than expected deficit."

"Focus now turns to next week’s events and releases, including jobs data on Tuesday, CPI on Wednesday, and the BoE on Thursday. A 25bpt cut is widely expected and fully priced, and we see risk in the statement tone and messaging around the outlook with markets pricing in a significant amount of easing and looking somewhat vulnerable to a neutral/marginally hawkish adjustment."

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FXStreet Insights Team

FXStreet

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