GBP buoyed by broader developments – Scotiabank

The Pound Sterling (GBP) is up 0.2% against the US Dollar (USD), a mid-performer among the G10 in an environment of broad-based USD weakness driven by sentiment, Scotiabank’s Chief FX Strategists Shaun Osborne and Eric Theoret report.

Markets ignore weak GDP & I.P. data

“The GBP’s performance is all the more notable in that markets are completely ignoring the deluge of weaker fundamental data that were released on Thursday, including disappointing Q3 GDP data and deeply contractionary industrial production figures.”

“Weaker growth remains a major concern of the UK as markets eye the Nov 26 Budget release, though markets appear to be signaling ongoing confidence in Chancellor Reeves’ ability to deliver on self imposed fiscal targets.”

“The RSI remains bearish, around 40 and well below the neutral threshold at 50. Last week’s recovery appears to have stalled, with the latest congestion centered around 1.3150. We remain cautious absent an extension of the recent recovery, looking to gains toward 1.33. We look to a near-term range bound between 1.3100 and 1.3200.”