The Pound Sterling (GBP) retains a firm tone as spot continues to ride the positive sentiment which developed around yesterday’s constructive PMI data, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

Few signs of weakness in the GBP’s technical picture

“Improving growth momentum, wages and slow progress on services CPI suggest that Bailey’s comments should support the cautious outlook for UK rates in the next few months (markets are not expecting another reduction in the Bank’s target rate until November).”

“There are few signs of weakness in the GBP’s technical picture. The bull run from the early August low has extended more or less as expected and nudged higher to a fraction under 1.3140 earlier, an effective retest of the July 2023 high.”

“Intraday trend support is close at 1.3110 and losses through here may signal some modest, corrective losses but minor dips to the mid/upper 1.30s should find support.”