GBP/USD: Softer as it falls through key support – Scotiabank

The Pound Sterling (GBP) falls through the key support at 1.2765 amid further moderation in Bank of England (BoE) and Ipsos inflation expectations, says Shaun Osborne, Chief FX Strategist at Scotiabank.

UK elections, softer inflation expectations drive GBP lower

“Sterling is softer on the session, tracking its peers. The NanBoE/Ipsos inflation expectations survey reflects a further moderation in inflation expectations over the coming year (2.8% in May, down from 3.0%). The result was the lowest since August 2021.”

“The latest polling ahead of the July 4th election shows Reform support overtaking the Conservatives—an event that has looked inevitable due to the Conservative’s terrible campaigning so far and Farage’s participation in the election.”

“Sterling’s losses leave Cable trading close to recent lows in the upper 1.26s where the GBP has found steady and consistent support since late May. Tentative signs of demand emerging just under the figure are emerging again. GBPUSD fell through our key support at 1.2675 within a session. Resistance is at 1.2765.”