GBP/USD still seems prone to setbacks at or a little above 1.25 – Scotiabank

GBP/USD grinds higher as markets focus on BoE tightening risks, economists at Scotiabank report.

Gains are choppy

The OECD noted yesterday that the UK will have one of the highest rates of inflation among the major economies this year (6.9%). That’s not a good look for the Pound but it should also be no surprise that markets are still pricing close to another 100 bps of BoE tightening over the coming months to combat price gains.

Cable continues to grind higher after a solid overall performance last week but gains are choppy and the Pound still seems prone to setbacks at or a little above 1.25.

Intraday support is 1.2425/35. Resistance is 1.2490/00 and 1.2550.