GBP/USD Trump seems good for Sterling
Updated
Instead of pulling back to 1.22 - which would be expected from a continued consolidation that started last October - GBP/USD is drawn to 1.25.
Interesting that GBP/USD is currently negatively correlated with the US stock market, and has been since Trump’s election (bottom chart).
Growing concerns with the US will favour GBP/USD, as too will concerns that inflation in the UK, now at 2.3% is over the 2% target and a rate rise becomes likely. We favour being long GBP/USD, and increasing even more above 1.28.
Interesting that GBP/USD is currently negatively correlated with the US stock market, and has been since Trump’s election (bottom chart).
Growing concerns with the US will favour GBP/USD, as too will concerns that inflation in the UK, now at 2.3% is over the 2% target and a rate rise becomes likely. We favour being long GBP/USD, and increasing even more above 1.28.
Note
Theresa Mays call for a snap election today is received well by the markets, adding fuel to this pro GBP trade.
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