Sterling is buying and selling steadily, however politics ought to be supportive this month. We have already seen a brand new UK-Indian commerce deal introduced yesterday, however hypothesis is rising {that a} US-UK commerce deal may very well be reached this week, ING’s FX analyst Chris Turner notes.
GBP/USD to commerce again to the 1.3445 excessive
“It is unclear whether or not London will be capable of negotiate away the ten% baseline US tariffs, however it would possibly be capable of safe reductions within the 25% tariff fee on the automotive and metal sectors. Moreover, we’re nonetheless specializing in the 19 Might UK-EU summit – the primary since Brexit. Warming relations with the EU sometimes sees sterling rally.”
“We have additionally acquired the small matter of the Financial institution of England rate-setting assembly tomorrow. Our UK economist, James Smith, thinks the market has acquired forward of itself in pricing too many fee cuts this 12 months. We due to this fact have a bias that GBP/USD trades again to the 1.3445 excessive over the following couple of days.”
