Back
17 Apr 2015
GBP/USD five year lows and then rallies through 1.5000?
FXStreet (Guatemala) - Analysts at Rabobank noted that at the start of this week sterling hit a near five year low vs. the USD.
Key Quotes:
"The move triggered a wave of headlines suggesting that sterling was falling foul of heightened political uncertainty in the UK ahead of May 7 general election. Political uncertainty is at an elevated level – for the UK, but the combination of broad-based USD strength and weak UK inflation goes a long way to explaining the recent downside pressure on cable."
"The fact that GBP/USD had pushed back to the 1.50 level by the end of the week on the back of soft US data is a reminder of the dominance of the USD’s moves on the cross rate."
"Going forward we expect that cable will remain vulnerable this year. Volatility could extend in the weeks after the UK election dependent on the perceived level of coherence of the new government. That said, monetary policy and specifically estimates regarding the timing of the first interest rate hikes from the Fed and the BoE will remain principal drivers for both GBP/USD and EUR/GBP."
Key Quotes:
"The move triggered a wave of headlines suggesting that sterling was falling foul of heightened political uncertainty in the UK ahead of May 7 general election. Political uncertainty is at an elevated level – for the UK, but the combination of broad-based USD strength and weak UK inflation goes a long way to explaining the recent downside pressure on cable."
"The fact that GBP/USD had pushed back to the 1.50 level by the end of the week on the back of soft US data is a reminder of the dominance of the USD’s moves on the cross rate."
"Going forward we expect that cable will remain vulnerable this year. Volatility could extend in the weeks after the UK election dependent on the perceived level of coherence of the new government. That said, monetary policy and specifically estimates regarding the timing of the first interest rate hikes from the Fed and the BoE will remain principal drivers for both GBP/USD and EUR/GBP."