EUR/GBP bearishness on BoE - BAML

By FXstreet.com | June 06, 2014 AAA

FXStreet (Guatemala) - Athanasios Vamvakidis, FX Strategist at BAML explained in their Year Ahead report they argued that changes in relative monetary policies will be a key driver for rates and FX markets in 2014.



Key Quotes:



“Using measures of the monetary policy stance in G10 economies, we found ECB monetary policy to be too tight and BoE monetary policy to be too loose, and argued that normalization will be negative for EUR/GBP."



"Indeed, although the BoE remained on hold yesterday, we see increasing signs of a tightening bias in the months ahead, while the ECB took a number of easing steps and flagged more easing looking forward if inflation fails to increase. EUR/GBP is down by 2.5% so far in 2014, but this move may only be the beginning."



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