GBP up vs. USD with focus on data ahead of June 19 meeting – Scotiabank

Pound Sterling (GBP) is up 0.3% vs. the US Dollar (USD) and a mid-performer among the G10 in an environment of broad-based USD weakness, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

The multi-month trend is bullish

"Domestic risk is somewhat elevated this week as we look to a heavy release calendar including employment on Tuesday, and industrial production and trade on Thursday. Fundamentals are offering some stability for the pound but not the basis for support as spreads have fallen back to the lower end of their range."

"As with EUR and the ECB, the GBP will need some support from the BoE and a shift in market expectations toward neutral, given that short-term rate expectations are still pricing nearly 40bpts of easing by the end of this year. Markets are pricing no change for the BoE’s next meeting on June 19."

"The multi-month trend is bullish given GBP/USD’s clear sequence of higher lows and higher highs. A fresh multi-year high was reached on Thursday, finally breaking above the 1.3600 level. We note the absence of meaningful resistance ahead of the 1.3750 level. Near-term support is expected below 1.3500."