17 Aug 2015
EUR/GBP sell on strength – Rabobank
FXStreet (Edinburgh) - Jane Foley, Senior Currency Strategist at Rabobank, sees occasional bullish attempts in EUR/GBP as opportunities to sell.
Key Quotes
“While uncertainties over the implications of Chinese and Fed policy could be sufficient to steady the hands of some of the MPC hawks in September, it seems very likely that at least three members of the MPC will be voting for an immediate rate hike by the end of the year (Miles will be replaced in September by Gertjan Vlieghe, whose position on the hawk/dove scale is not yet clear)”.
“That said, the BoE this month revised down its inflation forecasts and in view of weak commodity prices the market is expecting the tomorrow’s release of July CPI inflation to remains flat y/y”.
“Weak inflation could disappoint the sterling bulls, but with a policy tightening from the Bank likely to precede a move by all other major central banks aside from the Fed, we continue to favour selling EUR/GBP on rallies and look for a move towards 0.68 on a 9 mth view”.
Key Quotes
“While uncertainties over the implications of Chinese and Fed policy could be sufficient to steady the hands of some of the MPC hawks in September, it seems very likely that at least three members of the MPC will be voting for an immediate rate hike by the end of the year (Miles will be replaced in September by Gertjan Vlieghe, whose position on the hawk/dove scale is not yet clear)”.
“That said, the BoE this month revised down its inflation forecasts and in view of weak commodity prices the market is expecting the tomorrow’s release of July CPI inflation to remains flat y/y”.
“Weak inflation could disappoint the sterling bulls, but with a policy tightening from the Bank likely to precede a move by all other major central banks aside from the Fed, we continue to favour selling EUR/GBP on rallies and look for a move towards 0.68 on a 9 mth view”.