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3 Sep 2015
EUR/GBP sell the rallies – Rabobank
FXStreet (Edinburgh) - Senior Currency Strategist at Rabobank Jane Foley has recommended selling the cross on strength.
Key Quotes
“The rush to cover EUR shorts in recent weeks has helped push EUR/GBP back to levels last held in June”.
“The poorer tone of the pound sterling has also been drawn from doubts over the ability of the BoE to hike interest rates in the first half of next year, though the readiness of the UK economy for a spring 2016 hike will become more evident around the end of 2015”.
“Almost irrespective of the exact timing of the first BoE policy move, the BoE is still expected to start normalising policy at a time when the ECB is likely to be aggressively engaged in monetary easing and this should lend GBP support versus the EUR into 2016”.
“We view the recent move higher in EUR/GBP as offering a selling opportunity and continue to expect EUR/GBP to grind lower medium-term. We look for a test of the 0.70 level on a 3 to 6 months view”.
Key Quotes
“The rush to cover EUR shorts in recent weeks has helped push EUR/GBP back to levels last held in June”.
“The poorer tone of the pound sterling has also been drawn from doubts over the ability of the BoE to hike interest rates in the first half of next year, though the readiness of the UK economy for a spring 2016 hike will become more evident around the end of 2015”.
“Almost irrespective of the exact timing of the first BoE policy move, the BoE is still expected to start normalising policy at a time when the ECB is likely to be aggressively engaged in monetary easing and this should lend GBP support versus the EUR into 2016”.
“We view the recent move higher in EUR/GBP as offering a selling opportunity and continue to expect EUR/GBP to grind lower medium-term. We look for a test of the 0.70 level on a 3 to 6 months view”.