British Pound: Recovery eyes 1.36 against US Dollar – Scotiabank
Scotiabank strategists Shaun Osborne and Eric Theoret note the British Pound (GBP) is slightly softer but supported by a sharp repricing of Bank of England (BoE) tightening. Improving United Kingdom (UK)–United States (US) spreads and positive sentiment around the UK leadership transition underpin GBP, while technicians remain bullish, targeting an extension of gains toward 1.36 within a 1.3300–1.3400 near-term range.
BoE repricing underpins Pound outlook
"The pound is soft, down a fractional 0.1% vs. the USD and a mid-performer among the G10 currencies in mixed overall trade. The latest resurgence in geopolitical tensions has amplified the renewed tightening in BoE expectations that we had observed over the past week or so."
"The recovery in UK-US spreads is offering fundamental support to the GBP, and compounding the sentiment-related strength observed in response to the market’s favourable assessment of the current UK leadership transition."
"Neutral/bullish—the GBP’s recent recovery is notable, with clear gains from the mid-1.31s in late June. The recovery looks to have stalled around 1.34, with clear resistance offered by both the 50 and 200 day MA’s."
"We remain bullish however, and look to an extension of the GBP’s gains toward 1.36. We look to a near-term range bound between 1.3300 and 1.3400."
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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