GBP/USD to resume late July rally towards 1.3985 on a a break above 1.3900 – Westpac

There are tentative signs of a resumption of the late July rally in the GBP/USD pair. Above 1.3900 would add confidence to that view and target the recent peak of 1.3985, according to economists at Westpac.

Attention next week will be on Q2 GDP, labour data and CPI inflation

“There are tentative signs of a resumption of the late July rally. Above 1.3900 would add confidence to that view and target the recent peak of 1.3985.”

“There’s plenty of UK data over the next week for upside surprise potential, with growth, labour and inflation all featuring.”

“The reopening of the economy, expected resultant economic recovery and less stimulatory monetary policy, should support the GBP. That said, the BoE has signalled a clear and predictable path for the removal of QE, but also one which is designed to minimise market disruption, so that any upside moves in GBP in response are likely to be measured.” 

“Health outcomes are firmly in the mix. Cases fell in the second half of July, and have stalled so far in August, while hospitalisations have fallen slightly in August. Such improvements are probably related to the high vaccination rates (60% of the population is fully vaccinated, 75% of adults, putting the UK in the top 10 countries).”