Low UK/US trade intensity may allow outperformance ahead – Scotiabank

The CBI’s survey of retail sales activity weakened in November, with the survey also revealing the biggest drop in retail sentiment in two years, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

GBP trades steadily near term

“Data perhaps reflects something of a hangover for UK retailers after the government’s recent budget. Sterling is little changed on the session as investors mull the potential impact of tariffs on global FX.”

“The UK’s limited trade relationship with the US (relative to China, the Eurozone Mexico and Canada) suggest it will be a low priority for the Trump trade team which may allow for some GBP outperformance if tariffs are deployed more broadly in the coming months.”

“The Pound Sterling’s (GBP) consolidation around the mid/upper 1.25s extends this morning. The GBP is testing short-term trend resistance (1.2583) at writing but likely needs to clear recent minor highs at 1.2615 to signal more gains towards 1.2710/15. Support is 1.2500/10.”