GBP / USD Analysis

GBP / USD Analysis

The currency has reached its highest level since March 11, trading at 1.2930. However, Jeremy Stretch from CIBC Capital Markets thinks the pound will remain defensive on weak macro ground. The analyst thinks that the sterling will recover when a Brexit deal is reached close to the deadline. “A 14% improvement in monthly retail volumes has helped push the annual rate back to positive territory for the first time since February. The July PMI, which has recorded the highest performance since July 2015, aggressively recovered. Of course, the data are not compatible with data from such a low base. Increasing job losses as government support gradually withdraws creates an economic disappointment while at risk of remaining sterling in defense. " Although we expect BoE to approve negative data, 3m Libor's trading below the base rate since early July shows that investors are wary of interest rate cuts. "