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GBP's Sterling Performance

GBP
MNI (London)
  • GBP continued to make upside progress Tuesday, following PM Johnson's announced Road-Map out of COVID lock down, with GBP/USD able to edge on to $1.4117.
  • Early Asia saw rate achieve the next technical target at $1.4125(1.618% swing based on Tuesday pullback from $1.4098 to $1.4054) before the RBNZ OCR announcement provided the trigger for stronger demand.
  • Break below Gbp0.8600 in EUR/GBP cited by some for the strong GBP demand (suggested barrier trigger), dropped cross to Gbp0.8541, whilst GBP/USD spiked through $1.4150 then $1.4200(barrier?) with thin liquidity taking it on to $1.4237(BBG high) with Asian traders noting a trade at $1.4295 on the Reuters system, Gbp10mln transacted.
  • GBP/USD corrected back, found support at $1.4150 before fresh demand was seen emerging into Europe as rate edged to $1.4190.
  • Press reports suggesting lock down easing could be speeded up (Telegraph) may have added to GBP demand. Government have denied this, scientific advisers have said that each easing step needs 4-weeks to be assessed before moving on to the next one.
  • EUR/GBP now outside the base of its 1.0% 10-dma envelope (current Gbp0.8589) which if holds exposes the base of the 2.0% envelope at GBp0.8505. Cross tends not to like being outside the 1.0% envelope for too long.
  • Light UK data calendar Wednesday. BOE Haldane (hawk) speaks at 1200GMT. BOE Bailey(dove), Broadbent, Vlieghe(dove) and Haskel(dove) at TSC 1430GMT.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
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MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
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