GBP/USD comes with warnings to the bears- Scotiabank

By FXstreet.com | Updated August 26, 2014 AAA

FXStreet (Guatemala) - Camilla Sutton, CFA, CMT, Chief FX Strategist at Scotiabank noted that the GBP is flat, having traded in a tight 29-point range as the UK comes back from holidays.



Key Quotes



"There was only a minor reaction to a disappointing release of loans for house purchases; with the real focus for GBP the building and violent divergence between the UK-US 2 year yield and GBP/USD”



"The jump higher in the yield spread has come mainly from the UK side of the equation. A divergence of this magnitude is unlikely to last for an extended period."



"The options market is not pricing any renewed risk of upside GBP risk, as risk reversals continue to trade with the currency. If anything it is a warning to sterling bears that the bond market is beginning to price a different path. Today’s FT also carries the headline “WPP says profits ravaged by strong GBP”."



You May Also Like

Related Forex Analysis
  1. GBP/USD eyes a close on 1.58 handle
    Forex News

    GBP/USD eyes a close on 1.58 handle

  2. After consolidation phase, the GBP/USD attacks 1.5800 again
    Forex News

    After consolidation phase, the GBP/USD attacks 1.5800 again

  3. Bullish US Dollar Undermined by Shaky October Durable Goods Orders
    Forex News

    Bullish US Dollar Undermined by Shaky October Durable Goods Orders

  4. GBP up 0.2% on open – Scotiabank
    Forex News

    GBP up 0.2% on open – Scotiabank

  5. GBP/USD knocks the 1.5800 doors
    Forex News

    GBP/USD knocks the 1.5800 doors

Trading Center