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14 Aug 2013
Flash: GBP/USD a hot buy this week – BMO Capital markets
FXstreet.com (New York) - For the GBP, at this stage FX market participants appear to be looking for something to buy other than the USD, and the general skew seems to be that the better UK data provide the opportunity to do so, notes Greg Anderson at BMO Capital Markets.
Key quotes
“On the other hand, the rather subdued reading on July inflation (particularly at the core) is in our opinion the key component of UK data so far this week, whilst the tone of the August MPC minutes essentially cements the signals emanating from domestic price pressures.”
“Had headline CPI in July been in a 3.0%-3.3% range we think the long GBP trade would have been more compelling, but levels below 0.8550 in EUR/GBP for the reasons mentioned last week and today don’t appear to be good value to us in terms of buying GBP. After all, we’re already less than a full point away from the pre-July BoE statement level in the pair.”
Key quotes
“On the other hand, the rather subdued reading on July inflation (particularly at the core) is in our opinion the key component of UK data so far this week, whilst the tone of the August MPC minutes essentially cements the signals emanating from domestic price pressures.”
“Had headline CPI in July been in a 3.0%-3.3% range we think the long GBP trade would have been more compelling, but levels below 0.8550 in EUR/GBP for the reasons mentioned last week and today don’t appear to be good value to us in terms of buying GBP. After all, we’re already less than a full point away from the pre-July BoE statement level in the pair.”