5 Mar 2015
Short EUR/GBP better to play for sterling outperformance – Westpac
FXStreet (Barcelona) - Sean Callow of Westpac, comments that with UK’s macro scenario looking robust, shorting EUR/GBP is better than trading sterling’s outperformance through Cable.
Key Quotes
“we believe the pound is not being hampered by any political risk premium ahead of May’s election, though of course this could change in coming weeks.”
“The tone of the BoE’s Feb Inflation Report was also quite confi dent on both economic growth and the return of inflation to the 2% target. The UK job market meanwhile is not slowing down, with the unemployment rate now down to 5.7%, a low since Aug 2008.”
“Perhaps GBP/USD isn’t the best way to play for sterling outperformance though. Short EUR/GBP might be a better long term bet as the ECB kicks off EUR60bn worth of asset purchases each month until Sep 2016.”
Key Quotes
“we believe the pound is not being hampered by any political risk premium ahead of May’s election, though of course this could change in coming weeks.”
“The tone of the BoE’s Feb Inflation Report was also quite confi dent on both economic growth and the return of inflation to the 2% target. The UK job market meanwhile is not slowing down, with the unemployment rate now down to 5.7%, a low since Aug 2008.”
“Perhaps GBP/USD isn’t the best way to play for sterling outperformance though. Short EUR/GBP might be a better long term bet as the ECB kicks off EUR60bn worth of asset purchases each month until Sep 2016.”