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GBP/USD Edges to Fresh Daily Lows as NFP Unwind Continues

GBP
  • GBP/USD holds close to the day's lowest levels headed through to the NY crossover, with the rate edging closer to first intraday support at 1.2773, the 61.8% retracement of the Friday rally. Profit-taking in the pair coinciding with a modest bounce off lows for the USD Index keeping the pair under modest downward pressure.
  • Volumes look generally healthy for a Monday, with GBP futures activity sitting ~20% ahead of average for this time of day.
  • Currency moves mirroring the pullback in global rate hike expectations, led by the Fed after payrolls, but BoE pricing moving in much the same direction - the peak rate (March '24) has now retraced around 25bps of last week's rally in OIS terms.
  • BoE's Bailey the main GBP risk event for the rest of Monday: 1600BST / 1100ET sees the text release, at which markets look for broader explanation of the rationale behind the recent switch to 50bps as well as any response to recent market pricing.

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