GBP trades at 1.35, highest since 2022 - Scotiabank

Pound Sterling (GBP) gains are extending to near 1.35, leaving spot trading at its highest since early 2022, Scotiabank's Chief FX Strategist Shaun Osborne notes.

Strong Retail Sales curbs easing risk

"GBP is benefiting from generally better than expected economic data--including today's significantly stronger than expected Retail Sales rise of 1.2% (versus 0.3% forecast)--which have all but eliminated the risk of a June BoE cut and have reduced August easing risks significantly. Firmer GBP prospects and the generally soft USD trend suggest a push to the 1.40 could develop in the coming weeks."

"Strong weekly gains for the GBP suggest the broader bull trend in place since the start of the year is poised to resume. Spot gains are extending nicely above the downward-sloping channel (bull flag pattern) that developed over the past month, implying the risk of another, fairly quick and significant jump (~700bps) in the pound over the next 1-2 months. Support is 1.3430. Resistance is 1.3740/50 and 1.40."