Pound Jumps Most in 17 Months as Traders Eye Tight Labor Market
Comment of the Day

May 17 2022

Commentary by Eoin Treacy

Pound Jumps Most in 17 Months as Traders Eye Tight Labor Market

This article from Bloomberg may be of interest to subscribers. Here is a section:

“People don’t need too strong an excuse to buy sterling right now,” said Geoffrey Yu, a strategist at BNY Mellon. “Even a modicum of good data or even data that isn’t as bad as previously expected can see them coming back because of valuations.”

The move accompanies a broader dollar decline, with the greenback underperforming all Group-of-10 currencies bar the Japanese yen as risk sentiment rebounded. The Bloomberg Dollar Spot Index slid 0.5%, a third day of declines and the longest losing streak since March.

Eoin Treacy's view

The Pound is rebounding from the lower side of a lengthy medium-term range just as the Dollar Index is encountering some resistance at the upper side of its range. As risk appetite returns there is scope for both to unwind their respective overextensions.

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