The Pound Sterling (GBP) is holding strong, with positive sentiment surrounding recent PMI data driving its performance. Scotiabank’s Chief FX Strategist Shaun Osborne notes that there are few signs of weakness in the GBP’s technical picture, indicating that the currency’s upward trend is expected to continue. With improving growth momentum, wages, and slow progress on services CPI, market expectations for UK rates remain cautious in the coming months.
The pound’s recent bull run from the early August low has seen it rise to just under 1.3140, nearing the July 2023 high. The intraday trend support is around 1.3110, and minor corrective losses are possible if this level is breached. However, any dips into the mid to upper 1.30s should find support, maintaining the overall positive outlook for the GBP.
Osborne points out that market expectations do not anticipate another reduction in the Bank of England’s target rate until November, further supporting the GBP’s strength. The currency’s technical indicators suggest a mostly upward trajectory, with any potential losses likely to be temporary and minor in nature. This suggests that the GBP’s positive momentum is likely to continue in the near term.
Overall, the GBP’s performance is supported by a combination of economic data and market sentiment. Recent data showing improvements in growth momentum and wages, along with a cautious outlook on UK rates, are boosting the pound’s strength. The currency’s technical picture remains positive, with minimal signs of weakness indicating that the current upward trend is expected to persist.
In conclusion, the Pound Sterling is holding firm and maintaining a positive tone in the forex market. With support from recent PMI data, as well as improving growth momentum and wages, the GBP’s outlook remains strong. Technical indicators suggest that any potential corrective losses are likely to be temporary, with the currency’s bullish trend expected to continue. Overall, market expectations for UK rates and positive sentiment surrounding the GBP are contributing to its current strength, indicating a favorable outlook for the currency in the near term.
