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Jun 14 - 03:55 PM

GBP/USD - COMMENT-Traders Hesitant To Chase GBP/USD Lower With UK CPI Ahead

By Justin Mcqueen  —  Jun 14 - 01:35 PM

Cable fell on Friday with traders cutting exposure to European FX as uncertainty around the French elections increased, which in turn saw the pair drop to a 4-week low.

However, with UK CPI, the Bank of England rate decision and flash PMIs on the docket next week, traders are likely to be reticent in chasing GBP/USD breakouts, emphasized by the fleeting above moves above 1.28 and below 1.2675-90.

That said, as has been covered at length, the current positioning set-up, according to CFTC data would imply that risks are skewed to downside.

In any case, the upcoming UK CPI figures will be key in setting expectations for the BoE rate outlook, with particular attention placed on the services inflation print.
Currently, markets have attached a 44% chance of an August cut and thus risks are finely balanced heading into the report.

EUR/GBP held onto 0.84, though rallies are likely to be faded in the lead up to the first round of the French election.

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary

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