The pound rallied hard after the Bank of England talked about raising interest rates in the coming months. Pound/dollar has reached a new high for 2017, trading just under the 1.34 level. Can it break even higher above 1.35? That was the top of the post-Brexit range.
Here is their view, courtesy of eFXnews:
Credit Agricole CIB FX Strategy Research recommends buying any GBP dip post-BoE for the following reasons.
Firstly, the BoE stance could continue to support the market expectations about a potential BoE hike.
Secondly, expectations that PM May would soften her stance on Brexit could grow ahead of the Tori party conference in October.
Thirdly, GBP continues to look undervalued against EUR and especially vs. USD according to our long-term valuation model G10 VALFeX,” CACIB argues.
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