This week's release of UK jobs and especially inflation data on Wednesday could have a decent say in the pricing of the Bank of England's easing cycle and sterling, ING’s FX analyst Chris Turner notes.
GBP/USD can press the 1.3000 area
“UK rates have been dragged higher by those in the US over the last few weeks – even though BoE Governor Andrew Bailey has said the Bank could become a 'bit more activist' should inflation data allow it. Inflation data may well allow it this week if the UK September services CPI drops back to 5.2% year-on-year as consensus expects.”
“This means that EUR/GBP could hold support at 0.8350 this week and retest the recent high at 0.8435. GBP/USD could press the 1.3000 area. We doubt that today's UK investment summit will have a major impact on sterling, despite the bullish headlines. Instead, investors are waiting to see what UK Chancellor Rachel Reeves does with her first budget on 30 October.”
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