GBP: Few domestic developments ahead PMI's Thursday - Scotiabank

The Pound Sterling (GBP) steady, showing a marginal gain as it extends its recovery of the month-to-date pullback from its July 1 high, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

GBP is steady on the day

"Domestic releases have been limited, and all eyes are on Thursday's preliminary PMI's where manufacturing is expected to remain in contraction (sub-50) and services are expected to show a modest expansion (above 50). Spreads are offering support and moving in the GBP's favor. The short-term rates market continues to price roughly one full 25bpt rate cut for August 7 while assessing the extent of further easing by year-end."

"The multi-month bull trend looks to have resumed as we note a break back above the 50 day MA (1.3524) trend level. The latest pullback confirmed support in the upper-1.33s, offering a local double bottom that left the broader bull trend intact. The RSI is back above 50, in bullish territory. We look to a near term range bound between 1.3500 support and 1.3580 resistance.