The Pound Sterling (GBP) is outperforming the USD today, with a 0.4% increase pushing Cable back above the 1.29 mark, according to Scotiabank’s Chief FX Strategist Shaun Osborne.
Possibility of Cable Surging Towards 1.2950/1.30
“Although UK Retail Sales data for July came in slightly below expectations at 0.5%, core sales saw a 0.7% increase, surpassing forecasts. Additionally, June’s weak data has been revised slightly upward,” Osborne explained.
“Recent positive UK economic indicators such as jobs, GDP, and now Retail Sales have tempered market expectations for further easing by the Bank of England this year, with swaps implying a 43bps easing risk,” he added.
“Following a breakout from yesterday’s consolidation range in the upper 1.28s, GBP gains have accelerated. If Cable continues to hit short-term highs above 1.29, we could see it rally towards 1.2950/1.30,” Osborne predicted.
Analysis:
The Pound Sterling’s recent strength against the US Dollar indicates a positive outlook for the British currency. With strong economic data and reduced expectations of further monetary easing by the Bank of England, investors may see potential for additional gains in the GBP/USD pair. This could present opportunities for traders and investors to capitalize on the currency pair’s upward momentum and potentially profit from a stronger Pound Sterling.