GBP steady and performing on the crosses – Scotiabank

The Pound Sterling (GBP) is down a marginal 0.1% against the US Dollar (USD) and performing relatively well against most of the G10 currencies, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

RSI is marginally bearish

"Fiscal developments remain the primary focus for market participants as they assess the ongoing barrage of headlines related to the November 26 budget release. Interest rate differentials have recovered over the past week or so, offering the GBP some fundamental support."

"Near-term domestic risk lies with the release of CPI on Wednesday, followed by retail sales and the preliminary PMI’s scheduled for Friday. The short-term rates market is pricing about 20bpts of easing for the next BoE meeting in December and pricing a full 50bpts by June, reflecting the BoE’s recent communication and its focus on the softening UK labor market."

"The RSI is marginally bearish in the low 40s but well off the oversold sub-30 levels observed in early November. The GBP’s recovery looks to have stalled around resistance just below 1.32, with near-term support observed around 1.3080."