GBP/USD is dropping towards 1.4100. However, economists at ING expect cable to come under upside pressure this week – setting the 1.4300 level in its crosshairs.
More upside to GBP/USD
“With the uninspiring May US employment figures giving the Fed an excuse to be patient, the subsequent soft USD dynamics (driven by the deeply negative front real rates – likely to be further underscored by the US May CPI) should keep upside pressure on GBP/USD.
We don’t think concerns whether the full restriction easing is delivered by the 21 June deadline should weigh too much on GBP. Even if the date is postponed the impact on the economic activity should be limited (as any postponement should be just a matter of weeks in our view). This suggests that GBP/USD should keep pushing to the 1.4300 level this week.”
“On the UK data front, the main focus will be on April UK GDP (Friday). The reopening of shops and outdoor hospitality in April will, unsurprisingly, lead to another decent monthly growth, reiterate the positive UK economic outlook and be supportive of GBP. The focus will also be on the April Industrial and Manufacturing production (also on Friday).”
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