Sterling has largely ignored the announcement of a UK election, with the economic fundamentals still very much in charge
IG Client Sentiment Update: Our data shows the vast majority of traders in EUR/GBP are long at 79.10%, while traders in EUR/JPY ar...Sterling has edged higher against the United States Dollar in the past few days, but now faces a trading week very short of scheduled domestic trading cues. That needn’t be especially bad news for Sterling bulls, but the market could be vulnerable to drift which may see it head lower, especially if the US numbers hold up and dim rate-cut hopes there.
Instead, the Pound finds support in inflation’s surprise resilience and signs from the most recent Purchasing Managers Index data that the UK’s momentum out of recession is holding up. Major banks like HSBC, JP Morgan and Goldman Sachs, now think the Bank of England won’t be cutting rates until August, with a June move effectively off the table.
To be sure markets still think that the next US interest-rate move, when it comes, will be a cut. But even discussion of theoretically higher rates is enough to see the Dollar gain.for the first three months of this year, and the closely watched inflation indexes from the Personal Income and Expenditure series, known to be a favorite at the Fed.
GBP/USD appears to be confined within a broad range whose lower bound can be seen at retracement support of 1.24819. Admittedly the pair slipped below this level at the end of April, but it was traded back into very quickly after that fall.The $1.28 level still eludes sterling bulls on the upside, although if they can top it this coming week and stay above it, then the picture might turn more clearly bullish.
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