GBP Analysis and Talking Points
- GBP Direction Influenced by Brexit Developments
- Bank of England Meeting Uneventful
- UK Data Begins to Pick Up
GBP Direction Influenced by Brexit Developments
The sentiment around Brexit continues to remain relatively upbeat with comments by Brexit negotiator Barnier that a Brexit deal is realistic. The reaction in GBP from recent Brexit headlines emphasises that GBP is attractive on dips with the Pound more reactive to positive news, given that the markets have priced in bearish news. This has been highlighted in speculator positioning with GBP shorts at the highest since May 2017, suggesting that the attractiveness to chasing GBP lower has reduced.
Bank of England Meeting Uneventful
Given the focus for GBP traders on the latest Brexit developments and with the Bank of England raising rates next month. This week’s meeting may be somewhat uneventful with the central bank likely to reiterate the message from the last meeting, that the outlook for monetary policy is likely to be significantly altered by the Brexit outcome.
UK Data Begins to Pick Up
This morning’s GDP report is likely to provide some optimism for GBP bulls with the headline reading showing its fastest gain in nearly a year at 0.6%, above the expected 0.4%. Other notable data points will be the UK jobs report in which economists are looking for an uptick in wage growth.
Weekly Forecast’s on Sterling and Brexit
GBP: Positive Momentum Will Continue to Drive Sterling Higher – Nick Cawley, Market Analyst
GBPUSD Weekly Technical Outlook: Continuing to Press Higher – Nick Cawley, Market Analyst
--- Written by Justin McQueen, Market Analyst
To contact Justin, email him at Justin.mcqueen@ig.com
Follow Justin on Twitter @JMcQueenFX
