Home Barclays’ Trade Of The Week: Stay Short EUR/GBP

Barclays’ Trade Of The Week: Stay Short EUR/GBP

The euro-zone and UK economies have been going in different direction for quite a while, but the  EUR/GBP cross has not been a one way street, to say the least.

Where is the pair headed next? Barclays has a clear answer.

Here is their view, courtesy of eFXnews:

Investors following tactical strategies should consider staying short EUR/GBP this week, advises Barclays Capital in its weekly FX pick to clients.

Our economists pushed forward the timing of first hike by the BoE from November 2014 to February 2015, but our constructive view on the UK economy remains intact and we believe the market is pricing in too much dovishness from the BoE,” Barcalays says as a rationle behind this view.

“Our view on relative monetary policy between the BoE and ECB – that the former to start policy normalization while the latter to announce EGB QE in Q1 2015 suggests that EURGBP will continue to decline in coming months. Our forecast for Euro area and UK data this week is mixed relative to consensus, but we prefer selling EURGBP on any rallies,” Barclays adds.

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Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.