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Jun 29 - 11:55 AM

GBP/USD - COMMENT-Sterling Slips Near June Low As Delta Variant Threatens Growth

By Paul Spirgel  —  Jun 29 - 09:58 AM

GBP/USD fell 0.32% to 1.3835 on Tuesday, continuing to ride its lower 30-day Bolli downward and hovering just above Tuesday's session low of 1.3814 as rising COVID delta variant cases threatened UK growth and the benign global backdrop that has benefited sterlingthis year.

Forex traders have adopted a risk-off footing, seeking safety in haven currencies like the USD and JPY andsending the pound toward its June trend low just below 1.3790 as doubts rise regarding the UK's expected reopening in July.

Another reopening delay could lower UK growth and inflation expectations, forestalling BoE policy normalization.

Sterling traders are focused on Thursday's Mansion House speech by the BoE Governor Andrew Bailey, which may provide a glimpse at which way the bank is leaning on rates, particularly after the resignation of lone hawk Andy Haldane, who had voted to taper at last week's MPC meeting and with the Times shadow MPC calling for a GBP 50bn taper and 4 of 9 members seeking a rate hike before year-end nL2N2O50HY.

A dovish Mansion House appearance could trigger a test of June lows sub-1.38 and March-April lows by 1.3670.

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Source:
Refinitiv IFR Research/Market Commentary

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