The week has been a somewhat detrimental one for the pound’s home drivers, ING’s FX analyst Francesco Pesole notes.
Bearish USD bets are stopping USD features from being sustainable
“April GDP stunned yesterday with a 0.3% month-on-month contraction, and our economist notes how development could properly worsen later within the 12 months. Including to that, payrolls dropped considerably in Might, and a comparatively uneventful spending evaluation occasion did little or no to counsel the federal government can dodge tax rises on the Autumn finances.”
“Consistent with our name, EUR/GBP has damaged above 0.8500, and extended geopolitical turmoil within the Center East ought to drive additional features within the pair, the place we retain a bullish bias.”
“Cable has doubtlessly a large room for draw back correction given how costly it seems to be relative to price differentials. However now we have seen how structurally bearish USD bets are stopping greenback features from being sustainable. So we’d be extra cautious on that aspect.”
