23 Aug 2013
Flash: GBP/USD decisively higher - BBH
FXstreet.com (Barcelona) - Marc Chandler, BBH Global Currency Strategy Team, said Sterling saw an instant positive reaction to better-than-expected UK GDP figures.
Key quotes:
“GBP/USD made a decisive break back above the 1.5600 level on the data, but fell short of hitting 1.5650”.
“The Q2 GDP preview for the UK came at 1.5% y/y and 0.7% q/q, both 0.1 percentage point higher than expected. Exports came in at 3.6% and imports 2.5% (both about double expectations) and gross fixed capital formation at 1.7% (trice expectations)”.
“The difference between the data on the ground and the BoE’s dovish tone is becoming more tenuous”.
“Carney’s forward guidance (7.0% unemployment rate threshold) gives the bank a more clear reaction function upon which markets can form expectations”.
“It seems as if the BOE has so far managed to have come on top in comparison with the Fed and ECB. For example, UK’s 2-year gilt yields are little changed since early last week at 0.41%, still lower than the August highs of 0.44% and far below the June high of 0.54%”.
“The spread between the US and UK is flat which favoured the UK for the entire month of August (and for most of the year) is now back to flat”.
Key quotes:
“GBP/USD made a decisive break back above the 1.5600 level on the data, but fell short of hitting 1.5650”.
“The Q2 GDP preview for the UK came at 1.5% y/y and 0.7% q/q, both 0.1 percentage point higher than expected. Exports came in at 3.6% and imports 2.5% (both about double expectations) and gross fixed capital formation at 1.7% (trice expectations)”.
“The difference between the data on the ground and the BoE’s dovish tone is becoming more tenuous”.
“Carney’s forward guidance (7.0% unemployment rate threshold) gives the bank a more clear reaction function upon which markets can form expectations”.
“It seems as if the BOE has so far managed to have come on top in comparison with the Fed and ECB. For example, UK’s 2-year gilt yields are little changed since early last week at 0.41%, still lower than the August highs of 0.44% and far below the June high of 0.54%”.
“The spread between the US and UK is flat which favoured the UK for the entire month of August (and for most of the year) is now back to flat”.