Sterling is a little firmer on the session, regaining the low 1.26 zone where recent gains have stalled. The CBI Trends survey reflected slightly better—but still weak—Total Orders (-28) and a dip in Selling Prices (19, from 27), Scotiabank’s Chief FX Strategist Shaun Osborne notes.
GBP may struggle to extend
“Other survey data indicate weakening consumer confidence. Despite these challenges, markets have pared BoE rate expectations since the central bank’s policy decision and cautious messaging on the outlook earlier this month. Swaps anticipate 50bps of additional cuts this year.”
“Despite a weak (bearish) technical close for Cable yesterday (outside range reversal), the GBP has rebounded moderately so far today to regain 1.26. The low 1.26 zone has been a cap on the GBP’s recent rise, however, and likely remains so (1.2610 is the 38.2% Fibonacci retracement of the September/January drop in Cable). Support is 1.2555/65.”
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