|

GBP/USD: Pound consolidates in tight band – Scotiabank

Scotiabank analysts say the Pound is slightly softer against the Dollar, consolidating near 1.34 after a recovery from mid‑March lows. Mixed UK PMI data leave both manufacturing and services just above 50, while markets focus on BoE Chief Economist Pill’s speech as rate expectations have swung toward roughly 60 bps of tightening by year‑end.

Sterling holds within defined range

"The pound is soft, down 0.2% vs. the USD and seeing short-term congestion around 1.34. The geopolitical situation continues to dominate as a primary driver for the GBP, and Monday’s swings ultimately delivered a fractional extension of the recovery from mid-March."

"Fundamentally, the latest PMI’s delivered a mixed read on activity with a slight surprise in manufacturing and a slight disappointment in services, with both in mild expansion hovering just above the neutral threshold at 50."

"BoE risk lies with Chief Economist Pill’s speech scheduled for 9:30am ET as market participants look to guidance following the recent rapid swing in rate expectations with markets now pricing just over 60bpts of tightening by December."

"Neutral—the daily RSI is just below the neutral threshold at 50 following an impressive recovery from recent oversold lows."

"Near-term resistance is at 1.3450, and we look to a short-term range bound between 1.3350 and 1.3450. Short-term price action has confirmed a bullish reversal and a rising trend from the March 13 lows. Near-term resistance is at 1.3450, and we look to a short-term range bound between 1.3350 and 1.3450."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

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.

More from FXStreet Insights Team
Share:

Editor's Picks

GBP/USD alternates gains with losses near 1.3550

GBP/USD struggles to maintain the recent bull run and hovers around the 1.3550 zone on Tuesday. Cable’s irresolute price action follows the equally directionless performance of the Greenback, while the disheartening UK jobs data also seem to limit the upside.

EUR/USD climbs to daily highs past 1.1580

EUR/USD keeps the current bullish tone well in place and approaches the 1.1600 region on turnaround Tuesday. Indeed, the pair advances for the fourth day in a row amid the lack of direction in the US Dollar, steady uncertainty in the geopolitical landscape and diminishing bets for further Fed rate hikes.

Gold challenges $4,400 amid modest losses

Gold faces some fresh selling pressure and retreats modestly to the area below the $4,400 mark per troy ounce after two consecutive daily advances. The precious metal’s correction comes in tandem with the absence of direction in the US Dollar, declining US Treasury yields across the curve and continuous uncertainty in the Middle East crisis.

Crypto Today: Bitcoin, Ethereum, XRP falter amid escalating US-Iran tensions

Cryptocurrency prices are broadly correcting on Tuesday, with Bitcoin edging lower toward $64,000. Ethereum shows weakness amid ongoing narrow-range consolidation, while Ripple trades below $1.00, weighed down by falling technical indicators.

Fiscal concerns and doubts on Fed independence send US yields to long-term highs

US Treasury yields keep rising across the curve this week, with the yield for the 30-year Treasury bond reaching its highest level since 2007, during the global financial crisis, at 5.33% so far on Monday. A mix of concerns about the ballooning US fiscal deficit and growing doubts about the Federal Reserve’s Independence are increasing pressure on US Government Bonds.

Why is Crude Oil priced for a reopening the ships haven't made?
Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.