Cable continues to perform impressively, underpinned by this morning’s drop in unemployment and on hopes the BOE may be forced to hike rates sooner than the market had anticipated owing to stubbornly high inflation.
We’ve reached the 1.4840s, an area where the central bank of a very populous former colony was a rumored seller.
If cable can maintain its gains, the spike high at 1.4913 back from May 13 is the near-term target. Bulls would like to see the 1.4830/35 area maintained to keep the pressure to the topside.
As mentioned earlier, King’s Mansion House speech is later this evening. It usually fails to live up to the hype. King has consistently undercut GBP in the past but given the inflation problem he has on his hands, a firmer pound may be preferable to a rate hike in the present environment.