Keep Selling GBP Rallies: Credit Agricole
- Written by: Gary Howes
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Content provided by eFXnews
The British Pound may rally on occasion, but don’t mistake this for a return to an upside trend say Credit Agricole, whose strategists write:
When it comes to the GBP, downside risks persist.
According to BoE Governor Carney, the growth outlook remains highly uncertainty, irrespective of a weaker currency coming to the benefit of the export sector.
Most importantly, he stressed that there is growing evidence that the Brexit vote delayed investments, and such a development may yet have to show up in form of incoming data.
- Related: GBP/USD at 1.25 Sooner Rather than Later: Bank of America
- Fade Bounces in GBP: Credit Agricole
With respect to yesterday’s slightly weaker than expected June services PMI It must be noted that 89% of responses the survey is based on, were made ahead of the EU referendum.
In an environment, in which central bank rate expectations remain strongly capped and in which political uncertainty persists, sentiment is likely to remain in favour of selling GBP rallies.
