📝Market Remains Short GBP: UBS Strategy

Despite rate cut expectations being pared back for the BoE market positioning overall remains short GBP. This is likely due to broader strength in the dollar which is driving most of the moves in GBPUSD at the moment. UK CPI came in stronger than expected on Wednesday, but the brief move up in cable above 1.27 was quickly faded. The inflation data highlights BoE Governor Andrew Bailey's advice of adopting a gradual policy-easing approach in his commentary at the recent policy conference following a 25bp cut on Nov. 7 to 4.75%. GBPUSD trades in a tight range near 1.2650 on Thursday. - UBS Strategy