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GBP: Aggressive Pick-Up in Volumes Pressures GBP to Multi-Month Lows

GBP
CEEMEABulletUKGlobalForeign Exchange BulletsRegionMarkets

GBP/USD under pressure alongside both Gilt prices as well as a round of USD strength that's stemming from higher US yields and softer equity futures. A sharp uptick in GBP futures volumes on the latest leg lower (easily clearing any volume spike across the entirety of the UK Budget yesterday) suggests sizeable, aggressive trade going through in currency markets - although not directly following any headline or data release.

  • Risk-off trade seemingly catching up with the previously resilient GBP, which trades a new intraday low against both the USD and EUR. EUR/GBP now fast catching up with the 100-dma at 0.8428 - a break above which would be the first since early August.
  • GBP had traded well and rangebound since the Budget release - despite the volatility in UK rates. The latest leg lower may be the currency re-correlating with debt prices on Budget and spending concerns, as was the case for the Kwarteng Sep'22 Budget.
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GBP/USD under pressure alongside both Gilt prices as well as a round of USD strength that's stemming from higher US yields and softer equity futures. A sharp uptick in GBP futures volumes on the latest leg lower (easily clearing any volume spike across the entirety of the UK Budget yesterday) suggests sizeable, aggressive trade going through in currency markets - although not directly following any headline or data release.

  • Risk-off trade seemingly catching up with the previously resilient GBP, which trades a new intraday low against both the USD and EUR. EUR/GBP now fast catching up with the 100-dma at 0.8428 - a break above which would be the first since early August.
  • GBP had traded well and rangebound since the Budget release - despite the volatility in UK rates. The latest leg lower may be the currency re-correlating with debt prices on Budget and spending concerns, as was the case for the Kwarteng Sep'22 Budget.