Search ForexCrunch

The pound is sensitive to the political news while the euro is stable. How long can this last?

Here is their view, courtesy of eFXdata:

Societe Generale Cross Asset Strategy Research discusses GBP outlook and thinks that current political induced dips in GBP/USD are a buy as long as EUR/USD doesn’t change course and breaks below the important 1.15 level.

We favor buying sterling into politically-inspired weakness, buying GBP/USD dips as long as EUR/USD 1.15 holds.

It’s worth re-emphasizing that the main driver of GBP/USD remains EUR/USD. The EUR/GBP correlation with yields has been unstable and is now awful. Likewise the correlation between GBP/USD and real yields. There just isn’t a correlation between EUR/USD and EUR/GBP, but the  correlation between EUR/USD and GBP/USD is high, and stable most of the time,” SocGen argues.

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.