Forex Flash: GBP/USD potential decline to 1.5600 in 3m – Rabobank
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GBP/USD
FXstreet.com (Barcelona) - The sterling is back to session highs, after dipping to sub 1.5820 levels on poor data out of the UK public sector's finances. Stronger-than-expected ZEW Survey results in both the euro bloc and Germany have boosted the risk appetite, pushing the GBP higher.
"In our view, the admission by the UK Chancellor in November that the UK will miss two of the government's debt reduction target and related speculation over the UK's credit ratings outlook represented a significant worsening of the UK's fundamental backdrop", comments Jane Foley, Senior Currency Analyst at Rabobank.
"This change in the perceived future for the EUR has reduced interest in sterling and thus left the pound fully exposed to its poor and arguably worsening fundamental backdrop. Without EUR diversification demand sterling is likely to be more sensitive to poor UK economic data& While our weak USD view cushions our expectations for cable, we expect cable to track lower towards GBPUSD1.5600 on a 3 mth view", concludes the expert.
"In our view, the admission by the UK Chancellor in November that the UK will miss two of the government's debt reduction target and related speculation over the UK's credit ratings outlook represented a significant worsening of the UK's fundamental backdrop", comments Jane Foley, Senior Currency Analyst at Rabobank.
"This change in the perceived future for the EUR has reduced interest in sterling and thus left the pound fully exposed to its poor and arguably worsening fundamental backdrop. Without EUR diversification demand sterling is likely to be more sensitive to poor UK economic data& While our weak USD view cushions our expectations for cable, we expect cable to track lower towards GBPUSD1.5600 on a 3 mth view", concludes the expert.
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