GBP is outperforming with modest gain – Scotiabank

FXStreet Insights Team FXStreet

The Pound Sterling (GBP) is up marginally against the US Dollar (USD) and outperforming all of the G10 currencies as we head into Thursday’s NA session. Fundamental releases have been limited to second tier data, suggesting that the GBP’s relative outperformance can be attributed to a recovery in sentiment following Tuesday’s fiscal turbulence, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

GBP is supported by sentiment and recovery from fiscal turbulence

"The path forward remains challenging as markets consider the looming Nov 26 budget and its implications for growth, however the anticipated fiscal restraint remains a critical source of confidence for markets and should serve to limit the recent spiral in borrowing costs."

"The outlook for relative central bank policy remains supportive and the 2Y UK-US spread is hitting a fresh marginal high at levels last seen in October. As with EUR, markets are slowly shedding their easing bias, offering the GBP support as cuts are priced out."

"The RSI has recovered back to 50 and the 50 day MA (1.3483) remains a powerful level attracting near-term congestion. This week’s extended candle shadows have highlighted the importance of support below 1.3400, and resistance appears limited ahead of 1.3600. We look to a near-term range bound between 1.3400 support and 1.3500 resistance."

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.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD stays calm near 1.1650 to begin Fed week

EUR/USD struggles to find direction and trades in a narrow channel near 1.1650 on Monday. Investors refrain from taking large positions ahead of this week's critical Fed policy meeting, allowing the pair to stay in a consolidation phase following two consecutive weeks of bullish action.

GBP/USD edges lower toward 1.3300 as markets turn cautious

GBP/USD corrects lower toward 1.3300 on Monday after posting gains in the previous week. The markets adopt a cautious stance ahead of the highly-anticipated Fed meeting, making it difficult for the pair to gather bullish momentum.

Gold remains stuck near $4,200 as markets gear up for Fed

Gold extends its sideways grind at around $4,200 after posting marginal losses last week. The trading action turns subdued on Monday as market participants prepare for the upcoming Fed meeting, which will provide key insights into the short-term policy outlook.

Bitcoin and Ethereum aim for breakouts as Ripple holds at $2

Bitcoin, Ethereum, and Ripple record a minor recovery on Monday, starting the week on a positive note. The retail demand for major cryptocurrencies remains strong despite outflows from Bitcoin and Ethereum Exchange Traded Funds.

The Silver disconnection is real

Silver just hit a new all-time high. Neither did gold, nor mining stocks. They all reversed on an intraday basis, but silver’s move to new highs makes it still bullish overall, while the almost complete reversals in gold and miners make the latter technically bearish.