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Pound breaks above 1.3650, opening path toward 1.41 this year

Scotiabank says GBP/USD strength into the mid 1.36s is largely tied to US Dollar weakness, while UK survey data point to improving manufacturing orders and pricing power.

Reported · Written up by our desk · Major Pairs

Scotiabank strategists Shaun Osborne and Eric Theoret said the British pound’s rise in GBP/USD toward the mid 1.36s is driven more by weakness in the US Dollar than by underlying pound strength. They added that UK survey data show improving manufacturing orders and pricing power, supporting the move alongside the USD backdrop, according to FXStreet. On the technical outlook, FXStreet noted that Cable has met a near term objective by retesting the May peak. The firm expects that a sustained break above 1.3650 to 1.3660 could extend gains toward 1.41 within the year. FXStreet also reported near term price action across the broader market, including GBP/USD holding daily gains while easing back toward the 1.3630 region, and EUR/USD trading modestly lower around 1.1670. It tied the dollar’s shifting strength to ongoing attention to US money market developments. The same update highlighted a range of market moves that day, including US Treasury yields edging back up, with the 10 year yield at 4.672%, after a sharp pullback the prior day. It also said gold slipped below $4,500 per troy ounce as the dollar and yields improved.

Latest closeGold $4,432.00 ▲1.6%|EUR/USD 1.157 ▲0.4%|GBP/USD 1.354 ▲0.3%

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