7 Aug 2013
Flash: GBP skewed towards downside - Danske Bank
FXstreet.com (Barcelona) - Danske Bank analysts note that UK data have been surprisingly strong recently and momentum is clearly building in the UK economy.
Key Quotes
“Before the ‘Carney era’ the acceleration in the UK economy would probably have brought forward rate hike expectations. Nevertheless, Carney's arrival at the Bank of England has long pointed to changes in monetary policy and the question is whether Carney will present some significant changes in monetary policy or whether he has decided to go with a rather soft and guarded version of forward guidance.”
“Taking into account the strong UK data, there is a real risk that Carney disappoints the market today and considering the many short speculative GBP positions in place risks are skewed to the downside for EUR/GBP short term.”
Key Quotes
“Before the ‘Carney era’ the acceleration in the UK economy would probably have brought forward rate hike expectations. Nevertheless, Carney's arrival at the Bank of England has long pointed to changes in monetary policy and the question is whether Carney will present some significant changes in monetary policy or whether he has decided to go with a rather soft and guarded version of forward guidance.”
“Taking into account the strong UK data, there is a real risk that Carney disappoints the market today and considering the many short speculative GBP positions in place risks are skewed to the downside for EUR/GBP short term.”