GBP/USD to suffer a substantial drop to the 1.3150/75 zone – Westpac

GBP/USD has suffered a dive toward 1.34. Despite affirmation of BoE’s more hawkish stance, supply chain and political pressures could drive the cable towards 1.3150-75 prior to mid-month hard data releases, in the opinion of economists at Westpac.

Supply chain and labour shortage issues to weigh on the pound

“A lack of key hard data until mid-month leaves GBP prone to further pressures from the politicising of its current supply chain and labour shortage issues.” 

“Political pressures are likely to be key through the rest of the party conference season and into the Autumn Budget (Oct 27th). Unless hard data mid-month turns sentiment, GBP/USD could threaten deeper support in the 1.3150-75 area.”