GBPUSD:
Sterling stays on the back foot ahead of tomorrow’s Bank of England decision: consensus expects the Bank Rate to be held at 5.25 percent, but markets price only one or two modest cuts by year-end as inflation has slowed to 2.6 percent while June retail sales fell 0.9 percent m/m.
Additional pressure stems from fiscal concerns: the UK Treasury warned that GBP 4 billion of spending cuts will be needed in 2026 to keep the deficit at the 3 percent-of-GDP target, stoking stagflation fears and capping the pound’s upside.
The dollar is buoyed by inflows into US yield assets: the 10-year Treasury yield has climbed to 4.47 percent, widening the spread over 10-year gilts to 155 basis points—historically associated with GBPUSD weakness.
Trading Recommendation: SELL 1.3285, SL 1.3305, TP 1.3180
Origin: FreshForex
