The gap higher today owes to some optimism as newly appointed UK finance minister, Jeremy Hunt, looks to tear apart the mini-budget further as well as some hawkish tones from BOE governor Bailey over the weekend here.
Hunt is set to make a statement today and the latest report now is that Truss and himself has signed off on deferring the 1% cut in income tax until 2024. The main message of his statement later will be to ensure fiscal sustainability, largely aimed at the gilts market surely.
Breaking:
— Steven Swinford (@Steven_Swinford) October 17, 2022
Jeremy Hunt expected to go even further in ripping up mini budget *today*
He’s making announcement in Commons to support fiscal stability
Liz Truss & Hunt signed off deferring 1p cut in income tax until 2024 at Chequers yesterday
For now, the pound is taking in good comfort from the headlines and the opening gap higher with GBP/USD working its way up to 1.1260 levels. Last week's highs around 1.1350-60 will be a notable resistance point alongside the trendline resistance from the 13 September and 5 October highs, sitting around 1.1371 at the moment.
