EUR/GBP shorts still preferred - Societe Generale

By FXstreet.com | June 13, 2014 AAA

FXStreet (Barcelona) - Kit Juckes, Global Head of Currency Strategy at Societe Generale, signaled that EUR/GBP faces downward pressure.

Key Quotes

"For a lot of people, the kick-off in the first game of the World Cup was the main focus yesterday evening. For many others, it's all a load of nonsense and they were seeking ways to avoid the noise, fuss and over-excitement."

"Mark Carney however, timed his comments at the Mansion House perfectly as they were reported on the dot of 9pm. He warned that rates might rise sooner than market expect."

"He also said that rises will be gradual, and data-dependent, but the qualifications won't matter to a market which prices a slow pace of rises, starting next year. GBP/USD is re-testing 1.70 and my belief that this is pretty much the top will be sorely tested."

"In the short run, UK data is better and Carney sounds more willing to raise rates early than Yellen. There isn't much point fighting the move."

"EUR/GBP has broken through 0.80 and looking at how EUR/GBP and GBP/USD trade relative to rate differentials, EUR/GBP shorts are the more appealing trade. And the contrast between ECB and MPC is incredibly striking."

"Selling 5yr sterling vs 5yr Euros just looks more attractive today. As for the football, referee Yuichi Nishimura got most of the headlines in the end."

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