OctaFX | OctaFX Forex Broker
Open trading account

GBP: Near-term turbulence to continue given next week’s UK data splurge - ING

Viraj Patel, Foreign Exchange Strategist at ING, explains that it has been another politically-driven rollercoaster ride for GBP this week – albeit one that has proved to be anti-climactic for our medium-term constructive view.

Key Quotes

“Indeed, the link between resignations and reshuffles within PM May's Cabinet – and the short-term political risks that need to be priced into GBP – is somewhat tenuous. Yet, if the key to unlocking major further gains in UK asset prices is still progress in Brexit negotiations, then one can only expect the ongoing turbulence in GBP markets to continue.”

“Next week's UK data splurge – which includes the latest CPI, jobs, wage growth and retail sales releases – is unlikely to be game-changing for the BoE's policy outlook, although some positive surprises may see sentiment for a second rate hike resurface. The same can be said for today's UK industrial production data (0930 GMT). While it is understandable that the MPC are reluctant to show their policy hand amid this crucial period of Brexit talks, we do think the dovish repricing of BoE policy expectations within markets has been a tad excessive. A steeper UK curve should drive GBP/USD back up to the 1.34-1.36 area – or at the very least keep the pound supported above the 1.30 level.”

Slovakia Industrial Output (YoY) below forecasts (5.1%) in September: Actual (2.3%)

Slovakia Industrial Output (YoY) below forecasts (5.1%) in September: Actual (2.3%)
Read more Previous

AUD/USD once again fails ahead of 0.77 handle, headed back to session lows

   •  Struggles to move past 200-DMA strong barrier.    •  RBA dials back its inflation forecast, signals rates on hold.    •  Pickup in the US bond
Read more Next
Start livechat