UK data reports today were roundly disappointing, weighing on the Pound Sterling (GBP). Retail Sales fell a greater than expected 0.9% in the October month while November PMI data were generally weaker than expected, Scotiabank’s Chief FX Strategist Shaun Osborne notes.
GBP slides on weaker than expected Retail Sales and PMI reports
“Manufacturing and Service sector activity slowed sharply, in contrast to expectations of steady or slightly stronger growth signals. The Composite PMI fell nearly two full points from October’s 51.8 to 49.9, just into contraction territory. Markets continue to expect the BoE to hold policy in December but expectations for a February cut have improved. Swaps are pricing in 22bps of easing.”
“GBP has stabilized just above 1.25 after this morning’s sharp fall but weak price action and building bearish momentum on the short-, medium– and long-term oscillators suggest limited scope for corrective gains and more pressure for losses in the weeks ahead.”
“Expect firm resistance on minor gains to the 1.26 area now. Loss of support in the upper 1.25s leaves little obvious support for the pound on the charts until the mid-1.22s.”
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