GBP undertone remains soft – Scotiabank

Pound Sterling (GBP) is also little changed on the day but the market retains a soft undertone, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

Spot continues to pressure 1.3140/45

"Sentiment, reflected in short-term risk reversals, has shifted against the pound somewhat over the past week as investors fret about tax hikes in the budget and the risk that the BoE may cut rates next week—although OIS pricing reflects just 6-7bps of easing priced in for November 6th."

"Cable continues to lean quite hard on key support at 1.3140/45 (range low and major retracement support). A decisive break lower has not yet been established on the daily chart but a soft close on the week for the GBP may signal greater risk of more, near-term downside movement, potentially to the 1.2950/1.3050 range"