GBPUSD, H1
Sterling is trading neutrally, and is likely to remain so into next week’s EU leaders’ summit, which will focus the 27 on agreeing a roadmap for a post-Brexit trading relationship with the UK. The latest edition of the Barclay’s survey of investors showed that most investors are now expecting significant delays in the trading negotiation process beyond March 2019, and most don’t anticipate that a deal for a transition period won’t been made until October this year.
On the UK economy, the consensus view has remained steady over the last three months, with inflation seen slightly higher over the medium term. Most investors expect the BoE to hike rates in the second half of the year, though in the wake of the February BoE Inflation Report more have shifted to May as being the time for a second-in-the-cycle tightening. Sterling markets are presently pricing in about 80% odds for there being a 25 bp hike in the repo rate in May, and fully discounting a hike by August.
Cable is presently near net unchanged on the day, at 1.3951 bid, and the pair is trading near the midway point of a choppy sideways range that’s been persisting since late January.
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Andria Pichidi
Market Analyst
HotForex
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