We’re in the midst of an old-fashioned breakout in the pound. It’s now up in nine of the past 10 days, including three sizeable gains in a row.
The election uncertainty has cleared and Starmer isn’t promising tax hikes so the market is happy to invest in a place with a bit of political stability in a world of turmoil. Likely a bigger factor are the recent BOE comments that continue to highlight their belief that the UK inflation dynamics are different and that they’re less likely to cut rates.
Layer in some broader US dollar weakness and the pair is at an 11-month high.
We’re still a long ways from the old 1.60 magnet but there is still some room to run ahead of last year’s high at 1.3124.
Last week, I spoke with BNNBloomberg and made the case for buying the pound.
This article was written by Adam Button at www.forexlive.com.
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