24 Mar 2015
GBP to gain ground against EUR and JPY by year-end – Scotiabank
FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank, views that election uncertainty might make the near-term outlook for GBP cloudy, but the pound might gain ground against EUR and JPY, and stabilize against USD by 2015-end.
Key Quotes
“GBP is flat to yesterday’s close, being supported by ongoing broad USD weakness, which has helped to offset disappointing inflation data. February’s CPI dropped to 0%y/y on headline and 1.2%y/y on core; however there was a slight upside surprise on RPI.”
“Still the combination of low oil and food prices is suppressing inflationary pressures in the U.K., with few signs that currency depreciation to date is adding materially to inflation.”
“The risks remain that inflation turns negative before reversing later this year.”
“With low inflation, election uncertainty and vulnerable BoE pricing, we are cautious over the near‐term outlook for GBP; however into year‐end and 2016 we expect GBP to stabilize against the USD and gain ground against EUR and JPY.”
Key Quotes
“GBP is flat to yesterday’s close, being supported by ongoing broad USD weakness, which has helped to offset disappointing inflation data. February’s CPI dropped to 0%y/y on headline and 1.2%y/y on core; however there was a slight upside surprise on RPI.”
“Still the combination of low oil and food prices is suppressing inflationary pressures in the U.K., with few signs that currency depreciation to date is adding materially to inflation.”
“The risks remain that inflation turns negative before reversing later this year.”
“With low inflation, election uncertainty and vulnerable BoE pricing, we are cautious over the near‐term outlook for GBP; however into year‐end and 2016 we expect GBP to stabilize against the USD and gain ground against EUR and JPY.”