Article 50 has been triggered and the pound is stil trading at the 1.24 handle. What’s next? So far, the UK economy is growing quite strongly. The confirmation of the 0.7% growth rate in Q4 continues supporting the pound. Can it result in an additional push to the upside? Here is the view from NAB:
Here is their view, courtesy of eFXnews:
NAB FX Strategy Research notes that GBP could still head higher in the near-term arguing that the potential for a squeeze on existing short GBP is ever-present especially given that the market seems to abandon its earlier love of the US Dollar.
If materialized, NAB is looking mainly for GBP gains on the crosses.
“There is scope for position-squaring to help support the pound on many of its cross-rates. GBP/AUD could trade only very briefly down through 1.60,” NAB argues.
GBP/USD is trading circa 1.2477 and GBP/AUD is trading circa 1.6324 as of writing.
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