Sterling rose to nearly 1.3250 in overnight trading before falling, notes Shaun Osborne, Scotiabank’s chief currency strategist
There is a risk that the cable will test the trend support of 1.3200/05
“UK Gilts are moderately weak, giving the pound some modest support for yields, but Cable’s steady rise since early Asian trading suggests a buying programme rather than anything fundamental has been behind the gains. The BRC Shop Price Index fell year-on-year (-0.3%) for the first time in almost three years, suggesting easing inflationary pressures in the UK.”
“The GBP uptrend remains resilient after overnight gains to the mid-1.32s. However, the drift from the top is starting to look a little negative for the pound and suggests Cable is now at risk of a bit more downside during the day to test the 1.3200/05 trend support. Support below that is at 1.3125.
