4 Sep 2015
EUR/GBP: bid for the time being - CB
FXStreet (Guatemala) - EUR/GBP is currently on the bid and has found a path to the upside and back into line of the hourly 200 SMA that looks set to cross through the 50 SMA. However, on a fundamental basis, some analysts are calling for a weaker cross.
The euro has been buoyed of late in the market turmoil, demonstrated by the role it has played as a funding currency, while the short positions are paired back as money outflows flood back into the single currency. The pound was also struggling in its own right within this current environment, losing 6 big figures to the dollar since Black Monday.
This downside has come at a time where markets have started to price out a rate hike from the BoE coming as soon as the turn of the year, due to "headwinds stemming from weaker growth in emerging markets that suggest there is risk that the date for lift-off could be pushed back", as explained by Jane Foley, Senior Currency Strategist at Rabobank. However, she noted here that the same dynamics are affecting the ECB and maintains a 6-months view for the cross down at 0.70.
The euro has been buoyed of late in the market turmoil, demonstrated by the role it has played as a funding currency, while the short positions are paired back as money outflows flood back into the single currency. The pound was also struggling in its own right within this current environment, losing 6 big figures to the dollar since Black Monday.
This downside has come at a time where markets have started to price out a rate hike from the BoE coming as soon as the turn of the year, due to "headwinds stemming from weaker growth in emerging markets that suggest there is risk that the date for lift-off could be pushed back", as explained by Jane Foley, Senior Currency Strategist at Rabobank. However, she noted here that the same dynamics are affecting the ECB and maintains a 6-months view for the cross down at 0.70.