GBP: Eye on polls and economic releases - Westpac

In view of Tim Riddell, Research Analyst at Westpac, the direction of GBP will be governed by the upcoming UK polls result and economic data releases.

Key Quotes

 “A lack of core data releases after the relatively key retail sales release (18th) will highlight the forthcoming election. Labour support has ticked up in recent polls, but this is due to falling UKIP and Liberal support with Tories also gaining. The gap has narrowed slightly, but projections continue to suggest a considerable majority increase for May’s Conservative government.”

“Despite concerns around the consumer, recent data remains firm. The latest BoE’s Agents’ report, which the MPC monitor closely, shows the economy holding up relatively well. The BoE stated that they may withdraw accommodation more rapidly if a smooth Brexit path develops. Such a path may be unlikely, but with negotiations on ice during the election, GBP will respond to firmer data.”

“1.30-1.32 attracts but should still cap GBP/USD. Renewed Brexit concerns or faltering of the consumer could trigger corrections within the 1.20-1.32 range.”