Sterling steady amid global election uncertainties
GBP/USD remains broadly bounded by its June 25 high at 1.2702 and June 27 low at 1.2613 as markets digest French election news and prepare for Thursday's UK election, which is expected to yield a Labour victory.
A shift to a Labour government would have been GBP-negative if the party was still led by veteran socialist Jeremy Corbyn, but there are no such concerns about the looming shift to a business-friendly adminstration led by Keir Starmer.
Prevailing sentiment as expressed on LSEG's IRPR pages suggests the Bank of England will remain diligent in its fight against inflation and not speed up interest rate cuts, which are currently forecast at near 60% for August and 80% for September, regardless of the UK election result.
Mounting U.S. election angst in the aftermath of Thursday's U.S. presidential debate has had little impact on the dollar, which also speaks to market confidence in the Federal Reserve's independence and focus on bringing down persistent U.S. inflation.
With elections taking the backseat to inflation-fighting, for now, GBP/USD is likely to remain rangebound as both the Fed and BoE remain vigilant fighting inflation.
Key inflection points for the pair can be found at 1.2736, the 50% retracement of 1.2860-1.2613 on top, and the 200-day moving average at 1.2567 on the downside.
For more click on FXBUZ
GBP Chart: https://tmsnrt.rs/3XHFJ6Z
(Paul Spirgel is a Reuters market analyst. The views expressed are his own)
</body></html>Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
