GBP: No real signs of independent weakness yet – ING
The UK press is starting to reach a fever pitch with its speculation over what Chancellor Rachel Reeves will present in her first budget on 30 October, ING’s FX analyst Chris Turner notes.
Correction towards the 1.29 area seems probable
“Critics argue that the budget should have been presented earlier, which would have prevented this policy void from being filled by other news. Investors remain on the lookout for any signs that the UK Gilt market is becoming nervous again about potential spending plans.”
“True the 10-year Gilt-Bund spread has widened 25-30bp over the last month, although that may be as much down to miserable eurozone data than anything else. Equally, the five-year UK sovereign CDS has barely budged from a very tight 21bp – suggesting that there has not been a risk premium going into UK asset markets.”
“That said, it is becoming increasingly clear that the US Dollar (USD) will now stay a little stronger into US elections in November. This means we have not seen the lows for GBP/USD. A correction towards the 1.29 area seems probable in the coming weeks.”
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
FOLLOWME Trading Community Website: https://www.followme.com
Hot
No comment on record. Start new comment.