GBP/USD seen returning to 1.3000 – Scotiabank

Chief FX Strategist at Scotiabank Shaun Osborne believes Cable could re-test the 1.3000 neighbourhood in the near term.

Key Quotes

“Cable is trading back above 1.30 in the aftermath of the Fed but the GBP’s undertone remains soft and we think the pound remains vulnerable fundamentally”.

“News reports continue to highlight the risks facing London’s financial services industry as a consequence of Brexit. Bloomberg reports today that global banks are assuming that London will lose its control over clearing of EUR-denominated swaps and are making contingency plans for this, for example”.

“GBPUSD firmed modestly from yesterday’s lows near 1.2950 but gains are limited and the intraday price action signals decent selling interest on gains towards 1.31 earlier today”.

“We think the market may have peaked in the short run and that technical signals are turning bearish again from a short-term perspective, in line with the clearly bearish longer term price signals. We look for Cable to edge lower towards 1.30 again near-term (support at 1.3000/10 and 1.2950)”.