Free Trial
US STOCKS

Q3 Earnings Roundup:

US

Corporate Credit Update

GBPUSD TECHS

Trend Condition Remains Bullish

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access

GBP/USD Dips Below 1.0800, Record Low Of 1.0520 Within Sight

GBP

GBP/USD has been the focus point this morning. After falling -3.57% on Friday, we slipped to a low 1.0766 in early trade (per Bloomberg), before recovering, last just above 1.0800. The bearish downside target is the March 1985 record low of 1.0520. 1 month implied vol is at 17.35%, fresh highs since early 2020 (22.67% was the peak during this period).

  • The focus remains on Friday's significant shift in the government's fiscal policy stance, with large tax cuts undermining confidence in the pound.
  • There seemed little shift in the UK government's stance over the weekend, with various officials stating that they were focused on boosting long term growth, and not concerned about short term market gyrations (see this link and here as well for additional details).
  • Soaring front end yields, 2yr to 3.89%, +45bps on Friday, did little to support GBP. The focus will shift to funding the tax cuts (see this MNI Interview for more details) and a more aggressive hiking path from the BoE.
  • The outlook for the UK's rating is also likely to be a focus point, with the country already running twin deficits (current account + fiscal) of more than 10% of GDP for 2022 according to the latest Bloomberg consensus estimates.
206 words

To read the full story

Why Subscribe to

MarketNews.com

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.

GBP/USD has been the focus point this morning. After falling -3.57% on Friday, we slipped to a low 1.0766 in early trade (per Bloomberg), before recovering, last just above 1.0800. The bearish downside target is the March 1985 record low of 1.0520. 1 month implied vol is at 17.35%, fresh highs since early 2020 (22.67% was the peak during this period).

  • The focus remains on Friday's significant shift in the government's fiscal policy stance, with large tax cuts undermining confidence in the pound.
  • There seemed little shift in the UK government's stance over the weekend, with various officials stating that they were focused on boosting long term growth, and not concerned about short term market gyrations (see this link and here as well for additional details).
  • Soaring front end yields, 2yr to 3.89%, +45bps on Friday, did little to support GBP. The focus will shift to funding the tax cuts (see this MNI Interview for more details) and a more aggressive hiking path from the BoE.
  • The outlook for the UK's rating is also likely to be a focus point, with the country already running twin deficits (current account + fiscal) of more than 10% of GDP for 2022 according to the latest Bloomberg consensus estimates.