The Pound Sterling (GBP) is the day’s top G10 performer after Norwegian Krone (NOK), with sentiment-driven buying pushing GBP higher as risk reversals recover to late-August levels, Scotiabank’s Chief FX Strategists Shaun Osborne and Eric Theoret report.
BoE’s Mann speech eyed as sentiment-led GBP strengthens
“The pound is strong, up 0.6% vs. the USD and outperforming all of the G10 currencies with the exception of NOK. Sentiment appears to be dominating as the GBP extends its post-budget rally with a continued recovery in risk reversals and the options market reveals a significant moderation in the premium for protection against downside risk.”
“Riskies have recovered to levels last seen in late August, a period through which Chancellor Reeves’ suitability had been questioned. The BoE’s Mann (neutral/hawk) is scheduled to speak at noon.”