GBP extends gains through upper 1.25s - Scotiabank

Pound Sterling (GBP) is up modestly vs US Dollar (USD) on the session at writing after backing off slightly from the overnight peak just shy of 1.26--its highest level since the end of last year, Scotiabank's Chief FX Strategist Shaun Osborne notes. 

GBP nears key 1.2610 resistance

"GBP is up a solid 1.4% on the week, lagging only the SEK among the major currencies. The UK's trade position with the US--it runs a small bilateral deficit, with the only trade advantage for the UK coming in services--gives the pound some plot armour in the still developing tariff story. The BoE stressing a cautious approach to the policy outlook has been helpful over the past week as well."

"GBP/USD price action is constructive. Spot is trading at a YTD high this morning, with the late December peak at 1.2607 coinciding with the 38.2% retracement of the late 2024 sell-off in Cable at 1.2610. A push through the low 1.26s should pave the way for additional gains to the mid-1.27s. Support is 1.2550 intraday."