Politics and BoE are filling the hard data void as markets leapt on apparent shifts in BoE towards accommodation reduction, suggests Tim Riddell, Research Analyst at Westpac.
“However, comments this week from Carney and Haldane last week are highly data conditional, especially consumer confidence and business investment: themselves dependent upon vulnerable domestic politics and Brexit negotiations.”
“The latest Financial Stability Report highlights rising consumer credit risks. A slip in consumer activity or tightening of credit/financial conditions would therefore offset pressures to reduce accommodation. Data and survey watching are thus key for GBP into the 3 rd August BoE meeting.”
“A higher 1.24-1.30 range is applicable but bias remains to sell GBP/USD for a slide back towards range support at 1.24.”