GBP softer after failing to hold above 1.25 – Scotiabank

The Pound Sterling (GBP) is trading lower against the USD, broadly in line with its peers, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

GBP drop is liable to extend to the low/mid 1.23s

“UK bond yields are fractionally higher this morning but Gilts are outperforming modestly. Lower global bond yields are easing concerns about the viability of the Labour government’s fiscal plans—to some extent. The government is not entirely in the clear but the relief may help the GBP outperform the EUR in the near term.”

“Cable has slipped back from the low 1.25 zone after failing to secure a clean break above the figure over the past couple of sessions. Intraday support at 1.2430 is just about holding the pound up for now but should losses extend through 1.2420 (minor bull channel support), the GBP drop is liable to extend to the low/mid 1.23s.”