GBP: UK figures could strengthen Sterling as short covering occurs – ING
Sterling May Gain on Upcoming UK Economic Data
Upcoming reports on UK employment for November and inflation figures for December could offer some support to the British pound, possibly fueling an ongoing short squeeze that began in late November. According to Chris Turner, FX analyst at ING, while the GBP/USD pair may benefit most due to a softer US dollar, EUR/GBP could remain vulnerable, especially if broader risk-off sentiment emerges and limits sterling’s advance.
GBP/USD Poised to Strengthen as Dollar Softens
Turner suggests that this week’s UK data releases are likely to be mildly positive for the pound, potentially prolonging the recent short squeeze. He notes that while EUR/GBP had appeared to be the weaker link with possible downside towards 0.8600, early week dollar weakness could see GBP/USD driving the gains. A move above the 1.3415/1.3420 range may pave the way for a push towards 1.3450/1.3460.
However, Turner also cautions that the pound often lags during periods of heightened risk aversion, emphasizing that several factors could influence the currency’s performance in the near term.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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