Credit Agricole’s cable trading strategy:
GBP has been rebounding from this year’s Brexit-driven lows. This is mainly due to the recent better-than-expected macroeconmic data, suggesting less scope for the BoE to consider a more aggressive monetary policy stance anytime soon. However, with uncertainty regarding Brexit negotiations remaining high, it may be early days to suggest an ‘all clear’. Indeed, BoE Governor Mark Carney stressed as part of this week’s parliamentary testimony that a more aggressive policy stance could be considered if needed. If anything, long-term uncertainty suggests that the central bank will do its utmost to keep investors’ expectations of central bank monetary policy strongly capped. This is especially true should Fed monetary policy expectations start to stabilise anew.
