GBP: ‘Bumping Along The Bottom’ Still A Thematic Play’ – SocGen

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Pound/dollar has been under pressure due to four reasons but showed some signs of recovery. What’s next? What factors are moving it?

Here is their view, courtesy of eFXnews:

Societe Generale Cross Asset Strategy Research discusses GBP outlook in light of the recent political developments on the UK front.

This morning’s mover is sterling. 40 MPS are reportedly ready to sign a letter saying they have lost confidence in the Prime Minister and the pound has suffered accordingly.

Sterling is priced for soggy growth and difficult negotiations…“Bumping along the bottom” remains our best guess of what sterling will do from here,” SocGen argues. 

But we still like being long EUR/GBP at the lower end of the last few months’ range; and we like being short GBP/NOK and GBP/PLN even more. GBP/USD, by contrast, is a slave to EUR/USD,” SocGen advises.

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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 the 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.

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