GBP eases after November GDP disappoints – Scotiabank

The Pound Sterling (GBP) quickly gave back yesterday’s gains made on the better-than expected CPI data and has slipped a bit more today after November GDP disappointed, rising 0.1% M/M, versus 0.2% expected, on weaker industrial activity, Scotiabank’s Chief FX Strategist Shaun Osborne notes, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

Cable is testing minor support around 1.22

“Swaps reflect 23bps or so of easing anticipated for the February 6th policy decision now after BoE MPC member Taylor yesterday gave a little additional nudge to strengthening expectations of a cut by suggesting that the central bank may need to speed up easing this year in order to prevent a hard landing.”

“The GBP’s three-day rise from the 1.21 area has stalled and there is some risk that the rebound merely represented a mild correction in the downtrend ahead of renewed weakness. Cable is testing minor support around 1.22 as our session gets underway; weakness through here suggests a retest of 1.21—or lower—may follow. Resistance is 1.2310/20.”