GBP retains a soft undertone - Scotiabank

The Pound Sterling (USD) is down marginally on the session but, like many of its G10 counterparts, the pound has settled into a tight trading range into the end of the week, Scotiabank's Chief FX Strategist Shaun Osborne notes.

Gilts underperform again

"UK bonds remain marginal underperformers but 10Y yields are up only fractionally more than peer markets (a 2.5bps gain in UK yields versus a 2 bps rise in core Eurozone debt, for example). The UK government's fiscal plans remain under threat from the rise in UK bond yields but comparisons with the 2022 market rout remain wide of the mark, I think."

"Spot is holding an inside range (holding within yesterday's intraday range) signal on the daily chart so far--a signl that may suggest some relenting--in the short run, at least--in the bearish pressure on the GBP. The broader picture remains bearish, however, amid bearish trend indicators across the short-, medium-, and long-term oscillators."

"Gains will be hard to sustain and losses easier to come by in this environment. Resistance is 1.2350/60. Support is 1.2240/50."