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GBP: UK Importers in Focus as GBP/EUR Eyes Strong Weekly Close

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GBP/USD heads into the BoE decision off the session's recovery highs to almost precisely sit on the 50% retracement of the FOMC reaction range.

  • Consensus remains for an unchanged decision, and a 8-1, and the lack of a press conference today could contain any market fallout. We don't see guidance changing today, with the MPC looking for more certainty in the data outturns next year, before changing language. Full preview is here: https://media.marketnews.com/MNI_Bo_E_Preview_Dec24_dce60f0230.pdf
  • That said, EUR/GBP is clearly of interest at current levels, with the widening SFI-ER Z5 spread adding further pressure to put prices at new pullback lows of 0.8223 (lowest since Mar'22) and exposing a further bear trigger at 0.8203.
  • Of note, GBP/EUR - a key price for UK importers - looks set for a strong weekly close and appears to have consolidated the break of 1.2100 (1.2191 marks the next key resistance here) - which could come into further focus into year-end, with rallies providing further opportunity for importers to lock-in the multi-month rally before next year starts in earnest.
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GBP/USD heads into the BoE decision off the session's recovery highs to almost precisely sit on the 50% retracement of the FOMC reaction range.

  • Consensus remains for an unchanged decision, and a 8-1, and the lack of a press conference today could contain any market fallout. We don't see guidance changing today, with the MPC looking for more certainty in the data outturns next year, before changing language. Full preview is here: https://media.marketnews.com/MNI_Bo_E_Preview_Dec24_dce60f0230.pdf
  • That said, EUR/GBP is clearly of interest at current levels, with the widening SFI-ER Z5 spread adding further pressure to put prices at new pullback lows of 0.8223 (lowest since Mar'22) and exposing a further bear trigger at 0.8203.
  • Of note, GBP/EUR - a key price for UK importers - looks set for a strong weekly close and appears to have consolidated the break of 1.2100 (1.2191 marks the next key resistance here) - which could come into further focus into year-end, with rallies providing further opportunity for importers to lock-in the multi-month rally before next year starts in earnest.