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11 Mar 2015
GBP continuing to outperform alongside USD – BTMU
FXStreet (Barcelona) - Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, notes that pound has continued to outperform in the FX space, with EUR/GBP appearing to move towards pre-global crisis levels of 0.6500-0.7000.
Key Quotes
“The pound is continuing to outperform broadly weakening only modestly against the US dollar. The trade-weighted pound has now almost returned to its long-term average since the 1990’s driven by the sharp decline in EUR/GBP from the peak just below parity in late 2008 to almost the 0.7000-level today.”
“The pair appears to be heading back towards its pre-global financial crisis trading range between the 0.6500 and 0.7000 where it traded between 2003 and 2007.”
“The BoE remains more likely to follow the Fed in raising rates perhaps as early as late this year. The strengthening of the trade-weighted pound will weigh on core inflation and allow more gradual tightening.”
“As highlighted by BoE Governor Carney yesterday, the BoE is unlikely to follow the ECB is easing policy further in response to the current bout of low inflation. Governor Carney stated that “the one thing we can’t do, and the thing that would be extremely foolish, is to try and lean against this oil-price fall today”.”
Key Quotes
“The pound is continuing to outperform broadly weakening only modestly against the US dollar. The trade-weighted pound has now almost returned to its long-term average since the 1990’s driven by the sharp decline in EUR/GBP from the peak just below parity in late 2008 to almost the 0.7000-level today.”
“The pair appears to be heading back towards its pre-global financial crisis trading range between the 0.6500 and 0.7000 where it traded between 2003 and 2007.”
“The BoE remains more likely to follow the Fed in raising rates perhaps as early as late this year. The strengthening of the trade-weighted pound will weigh on core inflation and allow more gradual tightening.”
“As highlighted by BoE Governor Carney yesterday, the BoE is unlikely to follow the ECB is easing policy further in response to the current bout of low inflation. Governor Carney stated that “the one thing we can’t do, and the thing that would be extremely foolish, is to try and lean against this oil-price fall today”.”