GBP/USD remains resilient – BBH

Analysts at BBH assessed the recent performance of the Sterling.

Key Quotes

“Sterling was the best performing major currency last week, which entailed rising less than 0.2%  against the rising dollar.  Prime Minister May is expected to trigger Article 50 at the EU summit in early March.  As the details of the radical surgery are negotiated, there may be headline risk from time-to-time, but it may be superseded in the short-term by a macroeconomics, the focus on EMU politics, and the general dollar direction”.

“The US rate premium over the UK has begun growing again, and this may also weigh on sterling.  However, sterling is resilient against the dollar, and we suspect it comes from the demand against the euro.  Sterling held the 50% retracement level near $1.2345 last Tuesday, and although the upside momentum faded, the underlying tone remains firm.   Initial resistance may be near $1.2530, but the $1.2570-$1.2600 may be a stronger cap”.