GBP pushes toward late-October highs – Scotiabank

FXStreet Insights Team FXStreet

The Pound Sterling (GBP) stays firm near the top of its overnight range, with options markets sharply repricing protection against GBP weakness after the UK budget. Weak PMI data and steady inflation expectations had little impact, leaving BoE commentary and MPC member Mann’s remarks as the next key drivers, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

Sentiment lifts GBP as risk reversals surge

"The pound remains well supported as it pushes toward the upper end of a tight overnight range and threatens an extension of its recent gains to fresh highs at levels last seen in late October. Sentiment is dominating and risk reversals are surging as the options market reprices the cost of protection against GBP weakness in the aftermath of last week’s UK budget."

"Fundamental releases have been limited to second-tier construction PMI data (weak, disappointing) and as-expected inflation expectations figures. Comments from the BoE have been largely neutral, and near-term risk lies with a scheduled appearance from neutral MPC member Mann at 7:45am ET."

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FXStreet Insights Team

FXStreet

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