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FOREX: GBP Outperforming, Attention on US Election Highs for Cable

FOREX
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  • Despite some moderate outperformance for the greenback on Wednesday, GBP’s relative strength against G10 peers is standing out as we approach the US data, with cable consolidating close to its recovery highs of 1.2966. This leaves the pair within 50 pips of the psychological 1.3000 mark, and places growing attention on the US election (Nov 06) high at 1.3048, an important technical point on the chart. Moving average studies are highlighting a dominant uptrend.
  • Goldman Sachs think GBP-outperformance last week was mainly a function of the currency’s relative resilience to tariff risks, and they think that can continue to support Sterling versus other European currencies as EU tariffs come into reality.
  • Separately, Rabobank said the combination of this week’s release of monthly January UK GDP data and political bickering about the welfare budget will serve as a reminder of both the poor growth backdrop and tight fiscal position. They expect EUR/GBP to hold around the 0.84 area in the weeks ahead.
  • Aside from the monthly activity print on Friday, we remain unlikely to hear anything from the Bank of England’s MPC (as we have entered the blackout period).
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  • Despite some moderate outperformance for the greenback on Wednesday, GBP’s relative strength against G10 peers is standing out as we approach the US data, with cable consolidating close to its recovery highs of 1.2966. This leaves the pair within 50 pips of the psychological 1.3000 mark, and places growing attention on the US election (Nov 06) high at 1.3048, an important technical point on the chart. Moving average studies are highlighting a dominant uptrend.
  • Goldman Sachs think GBP-outperformance last week was mainly a function of the currency’s relative resilience to tariff risks, and they think that can continue to support Sterling versus other European currencies as EU tariffs come into reality.
  • Separately, Rabobank said the combination of this week’s release of monthly January UK GDP data and political bickering about the welfare budget will serve as a reminder of both the poor growth backdrop and tight fiscal position. They expect EUR/GBP to hold around the 0.84 area in the weeks ahead.
  • Aside from the monthly activity print on Friday, we remain unlikely to hear anything from the Bank of England’s MPC (as we have entered the blackout period).