The pain’s not over for GBP. With data surprises close to record highs, fiscal easing unlikely to help, political risk rising and the flow picture very negative, we remain bearish
Despite the bounce in the data, the pound is only 1% off the post-referendum lows. This suggests positioning is probably a lot lighter than record shorts on the IMM suggest. Indeed, our CORAX report shows investors have been trying to buy the pound since June. Signs of the negative flow story we previously highlighted are clear. Our live M&A monitor shows that save for one well-publicized deal in July inbound M&A has collapsed, while the latest data on foreign purchases of gilts shows outflows in July.
With the Fed seemingly out of play until December, cross trades look more attractive. Based on our view of another 10% decline in GBP TWI, a trendless EUR/USD would provide scope for EUR/GBP to move into the mid-90s. We also like selling pound versus NOK, which should benefit from a more hawkish Norges Bank and improving data.
Copyright © 2016 DB, eFXnews™
The article is published by one of the foremost sources of Forex trading information. Link to the original article above.
from eFXNews http://feedproxy.google.com/~r/Efxnews/~3/EYa-ARvNZow/pains-not-over-gbp-buy-eurgbp-targeting-mid-090s-deutsche-bank
from Online Forex Trading Resource http://its-veso.tumblr.com/post/151110198522
No comments:
Post a Comment