GBP/USD to test the 1.38 level on robust UK data – Scotiabank

GBP/USD is little changed ahead of UK jobs and CPI data this week. Strong data should help the cable to challenge the 1.38 level, according to economists at Scotiabank.

Sterling to find support from data

“Tomorrow’s December payrolls figures and Wednesday’s December CPI print (economists expect a 5.2% YoY increase) should firm up expectations for a 25bps hike by the BoE roughly two weeks from now (~90% priced in). 

“A perfect combination of strong data and hawkishsounding BoE speakers would likely lead the GBP to a test of 1.38, at least, to then set the 1.40 mark in its sights.” 

“Johnson’s declining popularity may act as a drag on the pound as according to The Sunday Times almost three dozen Tories (toward 54 required) are in favour of a no confidence vote on PM Johnson.”