Created
: 2024.10.07
2024.10.07 19:42
Last week's newspaper interview with Bank of England Governor Andrew Bailey - in which he opened the way to 'a bit more aggressive' easing - triggered a substantial unwinding of stretched GBP net longs, which amounted to 37% of open interest on 1 October, according to CFTC data, ING's FX analyst Francesco Pesole notes.
"Chief Economist Huw Pill offered GBP a lifeline on Friday as he warned against cutting too aggressively, but markets are now likely on the lookout for any slight drop in data to price in more easing in the Sonia curve. At the moment, markets factor in 22bp of cuts for November and another 17bp for December, meaning there is some more room for a dovish repricing."
"However, the data calendar is not particularly busy in the UK this week and only includes monthly GDP and industrial production figures for August. The bulk of market-moving releases is next week, with jobs data on the 15th and the CPI report on the 16th."
"EUR/GBP has already halved its post-Bailey gains, and we think the pair may stabilise or slip back toward 0.830 before next week's UK data. We have seen a nice directional move towards our near-term target of 1.300 in Cable. As we see a few more upside risks for the dollar and given that markets may be more inclined to price in BoE cuts after Bailey's comments, we stick to that call even if the pair might find some modest support in the coming days."
Created
: 2024.10.07
Last updated
: 2024.10.07
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy