FXStreet (Delhi) – Research Team at Nomura, notes that the BoE disappointed GBP bulls, but we expect the Fed and ECB to support GBP bulls into December’s meetings.
Key Quotes
“Among the European G10 FX, we think UK yields will react more to US yield rises (hence the spread widens less), while GBP will react less to USD appreciation.”
“We think the ECB’s renewed dovish stance should help GBP outperformance for three reasons: 1) bigger pressures on the Riksbank and SNB to follow the ECB, 2) a re-acceleration in euro area investors’ foreign bond investment, and 3) its positive impact on risk sentiment.”
“Even though the BoE may not help GBP outperformance in the near future, we recommend keeping a GBP long bias into key ECB and Fed meetings in December. We maintain our end-December EUR/GBP target at 0.69.”
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