GBP/USD retains a soft undertone – Scitabank

UK money supply and lending data for November came in on the weak side of expectations. Softer demand for mortgages suggests the rebound in UK house prices is starting to crimp demand, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

Yield spreads remain supportive

“The pound has picked up some support after yesterday’s dip to the mid-1.23s and the pound’s recent performance stands in stark contrast to relatively elevated UK rates and more supportive UK/US spreads than the pound’s recent performance would suggest.”

“Gains in Cable from yesterday’s intraday low suggest some consolidation in the pound’s recent losses but are not enough to signal a major rebound. The short-term charts suggest strong resistance overhead at 1.2480/00. Support is 1.2350.”