Little changed that day – Scotiabank

BoE Governor Bailey’s comments in Jackson Hole on Friday reflected a cautious outlook on near-term policy, notes Shaun Osborne, Scotiabank’s chief FX strategist.

BoE Governor Bailey maintains a cautious policy outlook

“Bailey said it was too early to declare victory over inflation, with price increases not sustainably back on target. The comments support market prices, which suggest policymakers will wait for more data before cutting rates again later this year (November). GBP was marginally lower in quiet trade with UK markets closed for the bank holiday.”

“Wired losses are marginal from Friday’s high of 1.3230 (highest since early 2022). Spot consolidates ahead of minor trend support at 1.3178; weakness below today’s trend support could prompt a deeper cable correction, but trend dynamics remain bullish here, suggesting a limited area of ​​weakness for now – and the potential for gains to extend to 1.3330 going forward.”

“Cable support looks firm at 1.3125/30.”