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27 Mar 2015
GBP/USD might shift to neutral levels, but political risk exists – Scotiabank
FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank, views that GBP/USD might plot fresh lows in the near-term, but shift to more neutral levels later, the outlook being highly dependent on how the UK election scenario works out.
Key Quotes
“GBP is up 0.4%, outperforming all the major currencies into the NA open, but still within its recent range.”
“Governor Carney, speaking for potentially the last time into the May 7th election, reiterated that the next interest rate move will be higher. However, the uncertainty around the upcoming elections is an important risk for GBP and with the upcoming schedule of debates and interviews it will be hard for markets to ignore.”
“GBP is likely to trade within a range, with the threat of fresh lows in the near-term; but eventually shift back towards move neutral levels.”
“However this is dependent on how the new government (or coalition) lands in terms of the outlook for the EU referendum, the devolution potential (shifting of sovereign state power to the subnational level) and fiscal plans, particularly revenue/spending and austerity.”
Key Quotes
“GBP is up 0.4%, outperforming all the major currencies into the NA open, but still within its recent range.”
“Governor Carney, speaking for potentially the last time into the May 7th election, reiterated that the next interest rate move will be higher. However, the uncertainty around the upcoming elections is an important risk for GBP and with the upcoming schedule of debates and interviews it will be hard for markets to ignore.”
“GBP is likely to trade within a range, with the threat of fresh lows in the near-term; but eventually shift back towards move neutral levels.”
“However this is dependent on how the new government (or coalition) lands in terms of the outlook for the EU referendum, the devolution potential (shifting of sovereign state power to the subnational level) and fiscal plans, particularly revenue/spending and austerity.”