The pound has different forces pulling it in both directions and sometimes seems directionless. Eventually it is going to choose a direction. What is it going to be?
Credit Agricole sees dips in sterling as buy opportunities.
Here is their view, courtesy of eFXnews:
For most of the last few weeks falling external demand expectations as related to weaker Eurozone growth momentum have been weighing on UK growth and interest rate prospects to the detriment of the GBP.
However, in an environment of firm services sector related business activity and improving labour market conditions there is limited room left of further falling monetary policy expectations. Accordingly we see limited room of the GBP correcting lower from the current levels.
On the contrary, we remain of the view that the currency should be bought on dips, for instance against the CHF.
This is also due to the view that risk sentiment is unlikely deteriorating further from the current levels.
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