Beware the GBP/USD Rebound Amid Surge in Retail Long-Interest

British Pound Talking Points

The decline in GBP/USD appears to have stalled ahead of the 2018-low (1.2662) amid signs of an imminent Brexit deal, with the British Pound outperforming against its major counterparts ahead of the Bank of England (BoE) interest rate decision, but the ongoing shift in retail sentiment undermines the recent rebound in the exchange rate as the pickup in volatility has been accompanied by a sharp rise in net-long interest.

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Beware the GBP/USD Rebound Amid Surge in Retail Long-Interest

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The BoE’s meeting may generate little interest as the Monetary Policy Committee (MPC) is widely expected to keep the Bank rate at 0.75%, and even the quarter inflation report (QIR) may spark a lackluster reaction as the central bank ‘continues to recognise that the economic outlook could be influenced significantly by the response of households, businesses and financial markets to developments related to the process of EU withdrawal.’

With that said, more of the same from Governor Mark Carney Co. may produce headwinds for the British Pound as the BoE sticks to its

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