GBP outperforming most G10 currencies – Scotiabank

Pound Sterling (GBP) is a relative outperformer as we head into Wednesday’s NA session, up nearly 0.3% vs. the US Dollar (USD) with a notable pop in response to the stronger than expected CPI release for the month of May. Headline and core are both in the mid-3% area and have seen a gentle rise after bottoming in late 2024 headline just below 2% and core above 3%.

GBP gains on stronger CPI ahead of BoE Thursday

"The inflation figures are important for policymakers heading into Thursday’s BoE, where a hold is widely anticipated and deliberation with center on the outlook for rates and the outlook for further easing. Short-term rates markets are pricing about 50bpts of easing by year-end with one 25bpt cut by September and a second additional cut but December."

The trend remains bullish, despite Tuesday’s pullback. GBP continues to trade above the 50 day MA (1.3381), an important level of medium-term support. Significant momentum has been lost however, and further losses from current levels would force a more meaningful reassessment of the technical outlook. For now, we look to support at 1.3400 and resistance around 1.3550.