- Analytics
- News and Tools
- Market News
- GBP/USD: Longs stretched but acceleration to 1.30 may gather momentum depending on Wednesday’s CPI – SocGen
GBP/USD: Longs stretched but acceleration to 1.30 may gather momentum depending on Wednesday’s CPI – SocGen
GBP/USD pauses after a 1.95% gain last week. Economists at Société Générale analyze GBP outlook ahead of the UK Consumer Price Index (CPI) data and the Bank of England (BoE) meeting this week.
A hawkish split with some members preferring 50 bps for the first time since January is not impossible
The acceleration in UK core inflation to a new high of 6.8% in May and wages ex-bonuses to 7.2% YoY in April sparked a dramatic repricing of the implied BoE terminal rate in the past two weeks from 5% to 6%. Whether we ultimately get there remains to be seen, but the bank could double down in the statement that tighter policy is required to rein in second-round effects. Compared to the UK, core inflation in the Eurozone and the US is 5.3%.
A hawkish split with some members preferring 50 bps for the first time since January is not impossible if core CPI surprises to the upside on Wednesday, the day before the rate decision.
We are mindful of technically stretched levels in Sterling and profit talking, but won’t rule out further appreciation just yet of GBP/USD towards 1.30 and depreciation of EUR/GBP towards 0.85 and 0.8475 (1.18 GBP/EUR).
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.
Bank transfers
