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17 Sep 2013
Flash: No reason to fight the GBP/USD uptrend - ANZ
FXstreet.com (Barcelona) - After the key breakout of 1.5750 last week, Brian Martin, FX Strategist at ANZ Research, notes the GBP/USD remains well supported and presently there is no definitive reason to fight the breakout.
Key Quotes
"In summary, we acknowledge the current dynamics driving the pound and could foresee conditions under which it may appreciate further to the low 1.60s vs USD. However, we are wary of the potential for sentiment to shift against sterling should underlying economic headwinds re-enforce themselves."
"The timing of the announcement of forward guidance in the UK coincided with uniformly stronger data releases. BoE Governor Carney is confident that the message that interest rates will stay low for a prolonged period of time is getting through and supporting economic optimism."
"Whether that is the case or the market is sceptical about the BoE's commitment to forward guidance is debatable. Inflation is at 2.8% y/y and based on the NIESR's estimates for GDP growth in the three months to August (+0.9%), the economy is running at an annualised 3.6% making it difficult to see how the BoE could ease policy at this juncture."
Key Quotes
"In summary, we acknowledge the current dynamics driving the pound and could foresee conditions under which it may appreciate further to the low 1.60s vs USD. However, we are wary of the potential for sentiment to shift against sterling should underlying economic headwinds re-enforce themselves."
"The timing of the announcement of forward guidance in the UK coincided with uniformly stronger data releases. BoE Governor Carney is confident that the message that interest rates will stay low for a prolonged period of time is getting through and supporting economic optimism."
"Whether that is the case or the market is sceptical about the BoE's commitment to forward guidance is debatable. Inflation is at 2.8% y/y and based on the NIESR's estimates for GDP growth in the three months to August (+0.9%), the economy is running at an annualised 3.6% making it difficult to see how the BoE could ease policy at this juncture."