The Bank of England took a hawkish stance, saying that rate hikes will come faster and earlier and it sent the pound higher. GBP/USD jumped well above 1.40 before stocks sent cable lower. But what about EUR/GBP?
Here is their view, courtesy of eFXnews:
EUR/GBP, GBP/USD: A Hawkish BoE Signal; GBP To Stay Firm Vs EUR & USD N-Term – BTMU
BTMU Research discusses the reaction to today’s BoE policy meeting in which MPC voted to maintain the Bank Rate at 0.50% and the stock of purchased assets financed by the issuance of central bank reserves at £435 billion.
“We had been expecting the BoE to send a more hawkish policy signal today, but even still we were taken by surprise somewhat by the explicit guidance delivered over the timing of future rate hikes.
In these circumstances, we expect the pound to continue trading at stronger levels in the near-term against both the euro and US dollar. We see no reason to alter our pound forecasts from the latest monthly report (which had been based on the assumption of a May BoE rate hike,” BTMU argues.
EUR/GBP: GBP Bulls Looking For Tactical Opportunities May Consider Short EUR/GBP – ING
ING Research discusses GBP outlook and maintains its bullish bias on GBP/USD targeting 1.45 in Q1 (see here), while sees better tactical opportunities in selling EUR/GBP around current levels.
“Our preferred tact remains looking to buy GBP on dips. Investors looking for tactical opportunities may see greater value in EUR/GBP downside on the hawkish BoE tilt given that the dollar is staging a mini-recovery. We’re targeting 0.86 for 1Q18 – with the Italian elections and more cautious ECB talk keeping EUR/GBP upside in check.
We are still bullish on GBP/USD over the medium-term (targeting 1.45),” ING advises.
For lots more FX trades from major banks, sign up to eFXplus
By signing up to eFXplus via the link above, you are directly supporting Forex Crunch.
Share
