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Oct 21 - 11:55 AM

GBP/USD - COMMENT-Sterling Gains On Upbeat Brexit, Negative Rate Views Fragile

By Paul Spirgel  —  Oct 21 - 10:35 AM

GBP/USD surged to a six-week high by 1.3147 on Wednesday, breaking through resistance at the daily cloud top and upper 30-day Bolli above 1.3080, which should put higher levels on the agenda if conciliatory Brexit talk produces tangible results.

Cable's gains tracked a broad risk move higher as markets eye U.S. relief aid, which is expected to lift global growth nL1N2HB0H1.

The pound received an added boost in early U.S. trade after BoE Deputy Governor Dave Ramsden reiterating the MPC's view that now was not the time to use negative rates nS8N2GL02T and optimistic comments by EU negotiator Michel Barnier on Brexit nS8N2H5011.

Sterling bulls should be cautious.
Short-sterling futures still project negative rates beginning in early 2021 0#FSS:.
Further, the upbeat Barnier comments nL8N2HC2JR fall far short of noting progress on a deal, touting the need for both sides to work constructively and compromise.

The break above the daily cloud puts the Sept. 7 high at 1.3173 in focus.
Without a Brexit deal todamp negative-rates speculation, recent GBP/USD gains are likely to be short-lived.

For more click on FXBUZ

GBP Chart: Click here

Refinitiv IFR Research/Market Commentary


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