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Thomson Reuters
May 07 - 02:36 PM
GBP/USD - COMMENT-No News Is Good News For GBP/USD, But It Won't Last
First appeared on eFXplus on May 07 - 11:35 AM

Today's UK bank holiday gave sterling a break from the recent spate of weak economic data, but the slew of reports due ahead of Thursday's BoE meeting ( Click here

) could bring back the pressure if they don't improve.
The pause in data helped GBP/USD buck broad USD strength, with the DXY up 0.23 percent at 92.77.
The pound bounced off today's early U.S. session low by 1.3516, firming into the European close.
Come what may in the data, it will be difficult to reverse the recent drop in market expectations for UK rate normalization.
GBPOIS ( Click here

) now indicates 23bps of hikes in all of 2018 (BOEWATCH), where once there was a near 50 percent chance for a second 25bp hike by December 2018.
The upcoming data and Thursday's BoE member votes and comments will be scrutinized for hints at UK rate normalization.
More weak data and more dovish rhetoric will likely push GBP/USD to new 2018 lows below 1.3458 and puts November 2017 lows by 1.3000 in sharper view.

Chart: Click here

BoE Doves & Hawks: Click here

Source:
Thomson Reuters IFR Markets

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