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14 May 2015
GBP/USD upside looks overdone – BTMU
FXStreet (Edinburgh) - Currency Analyst at BTMU Lee Hardman sees the recent strong recovery in GBP/USD as likely overdone.
Key Quotes
“The strengthening of the pound has been most evident recently against the US dollar. However, we see only limited scope for further GBP/USD upside in the near term beyond the 1.6000-level”.
“Pound strength against the US dollar already appears overdone in the near-term relative to yield spreads between the UK and US”.
“We still expect the Fed to raise rates ahead of the BoE as implied by current market pricing”.
“So unless BoE rate hike expectations are brought forward and/or Fed rate hike expectations are pushed back materially we doubt that the current strength of the pound against the US dollar can be sustained beyond the near-term”.
Key Quotes
“The strengthening of the pound has been most evident recently against the US dollar. However, we see only limited scope for further GBP/USD upside in the near term beyond the 1.6000-level”.
“Pound strength against the US dollar already appears overdone in the near-term relative to yield spreads between the UK and US”.
“We still expect the Fed to raise rates ahead of the BoE as implied by current market pricing”.
“So unless BoE rate hike expectations are brought forward and/or Fed rate hike expectations are pushed back materially we doubt that the current strength of the pound against the US dollar can be sustained beyond the near-term”.