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Sterling Swings Higher, Cable Extends Recovery From Record Lows

GBP

Sterling crosses post a leg higher amid thin liquidity in the Asia-Pac morning, with cable entering the fourth consecutive day of recovery after plunging to an all-time low on Monday.

  • GBP/USD crept higher through Thursday's London session and over the WMR fix, even as UK Prime Minister Truss and Chancellor Kwarteng defended their controversial tax-cut plans.
  • PM Truss is refusing to walk back on her strategy, despite a slump in support for the Tories in the latest YouGov poll, which showed Labour's lead widening to 33pp.
  • BoE Chief Economist Pill predicted a "significant and necessary monetary policy response [to these fiscal plans] in November," which reduced the perceived odds of an off-cycle rate hike.
  • With September drawing to an end, month- and quarter-end rebalancing provides the usual suspect behind today's move.
  • There is also potential for participants squaring positions ahead of key risk events in the UK, with PM Truss expected to hold emergency talks with the Office for Budget Responsibility today, before the Conservative Party Conference kicks off on Sunday.
  • Cable last trades at $1.1173, up 56 pips on the day and off the $1.1203 session high. Bullish focus falls on Sep 23 high of $1.1274, while bears count on the pair mounting another challenge to its record low of $1.0350..
  • EUR/GBP last at $0.8798, down 30 pips on the day. Initial support is at Sep 19 high of GBP0.8788, followed by Sep 22 low of GBP0.8692. Bulls look for a rebound towards Sep 26 high of GBP0.9266.
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Sterling crosses post a leg higher amid thin liquidity in the Asia-Pac morning, with cable entering the fourth consecutive day of recovery after plunging to an all-time low on Monday.

  • GBP/USD crept higher through Thursday's London session and over the WMR fix, even as UK Prime Minister Truss and Chancellor Kwarteng defended their controversial tax-cut plans.
  • PM Truss is refusing to walk back on her strategy, despite a slump in support for the Tories in the latest YouGov poll, which showed Labour's lead widening to 33pp.
  • BoE Chief Economist Pill predicted a "significant and necessary monetary policy response [to these fiscal plans] in November," which reduced the perceived odds of an off-cycle rate hike.
  • With September drawing to an end, month- and quarter-end rebalancing provides the usual suspect behind today's move.
  • There is also potential for participants squaring positions ahead of key risk events in the UK, with PM Truss expected to hold emergency talks with the Office for Budget Responsibility today, before the Conservative Party Conference kicks off on Sunday.
  • Cable last trades at $1.1173, up 56 pips on the day and off the $1.1203 session high. Bullish focus falls on Sep 23 high of $1.1274, while bears count on the pair mounting another challenge to its record low of $1.0350..
  • EUR/GBP last at $0.8798, down 30 pips on the day. Initial support is at Sep 19 high of GBP0.8788, followed by Sep 22 low of GBP0.8692. Bulls look for a rebound towards Sep 26 high of GBP0.9266.