VOT Research Desk
Before a potential push to 1.20 on a further short-squeeze, 1.1670/1.1750 could be the short-term corrective bottom for GBPUSD (short GBP had been a conviction call amongst fund managers).
In the grand scheme of things, however, even the current GBPUSD levels around 1.18 should be appealing to those that have GBP receivables.
The UK’s Chancellor, Jeremy Hunt, has stepped up his rhetoric about how hurtful Thursday’s fall statement, which includes tax increases for everyone and significant reductions in government spending, will be.
Although none of the options are popular politically, failing to deliver would result in another wave of Gilt and sterling sells.
We believe that Cable could return to 1.10 in the upcoming months.
