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9 Aug 2013
Flash: GBP/USD driven higher by positioning - Rabobank
FXstreet.com (Barcelona) - Jane Foley, Senior Currency Strategist at Rabobank notes that if positioning has played a part in the AUD’s recovery this week, it has also had a function in driving higher the pound.
Key Quotes
“The market has stayed very short of sterling despite the recent improvement in UK economic data.”
“Governor Carney may have been trying to establish the dovish credentials of the Bank of England at this week’s presentation of the Quarterly Inflation Report.”
“Instead, the forward guidance outlined by the Governor was so pitted by caveats that investors are now worried that conditions for a policy tightening could actually be triggered sooner than the consensus had been expecting.”
“Going forward we expect that Carney will push back against this view and will work hard to reinstate the expectation that BoE policy settings will remain accommodative for a prolonged period.”
“While cable remains a buy on dips in the very near-term, its upside potential is likely to be limited. The minutes of the August MPC are due next Wednesday and these are likely to hold a dovish tone.”
Key Quotes
“The market has stayed very short of sterling despite the recent improvement in UK economic data.”
“Governor Carney may have been trying to establish the dovish credentials of the Bank of England at this week’s presentation of the Quarterly Inflation Report.”
“Instead, the forward guidance outlined by the Governor was so pitted by caveats that investors are now worried that conditions for a policy tightening could actually be triggered sooner than the consensus had been expecting.”
“Going forward we expect that Carney will push back against this view and will work hard to reinstate the expectation that BoE policy settings will remain accommodative for a prolonged period.”
“While cable remains a buy on dips in the very near-term, its upside potential is likely to be limited. The minutes of the August MPC are due next Wednesday and these are likely to hold a dovish tone.”