GBP: Waiting to enter for long positions – Nomura
FXStreet (Córdoba) – According to the Global FX Strategy Team at Nomura momentum weakened in the GBP after August, but they see the currency gaining strength sometime in the near future.
Key Quotes:
“We still believe GBP to restart its outperformance, as the BoE rate hike timing is repriced, while expected ECB QE extension to sustain strong foreign flows into the UK into 2016-17. Even though the recently announced huge M&A deal may not generate strong GBP purchases as the face amount suggests, FDI flows will remain GBP positive.
“We are looking to enter GBP long positions again, while we stay on the sidelines for now, as the ECB and FOMC meetings before the next Super Thursday can give us better entry points, against EUR and/or USD.
“In the near term, EUR/GBP will likely be influenced by the ECB meeting this Thursday, which could send EUR higher against GBP, as we cannot rule out the possibility of disappointment after the meeting. The FOMC is also unlikely to rule out the possibility of a December lift-off at the next meeting on 28 October, which could support USD against GBP as well (even though we do not expect the Fed to hike in December).”
According to the Global FX Strategy Team at Nomura momentum weakened in the GBP after August, but they see the currency gaining strength sometime in the near future.
(Market News Provided by FXstreet)