29 Oct 2013
Flash: Pound under pressure - BTMU
FXstreet.com (London) - Lee Hardman, strategist at The Bank of Tokyo-Mitsubishi UFJ explained the pound has also underperformed overnight which has been triggered by EUR/GBP.
Key Quotes:
“The pound has also underperformed overnight which has been triggered by EUR/GBP breaking back above resistance from its 200-day moving average at around 0.8535 which may encourage further pound weakness in the near-term”.
“Fundamentally the pound is being undermined by the market moving to delay the expected timing and scale of monetary tightening from the BoE”.
“The implied yield on the December 2014 and December 2015 futures contracts have declined by around 30 and 50 basis points respectively since early September”.
“The sharp decline in UK yields continues to highlight that they remain tightly linked to developments in US yields with delayed Fed QE tapering expectations also serving to undermine the pound in the near-term, even as the UK economy continues to remain in a robust recovery phase”.
Key Quotes:
“The pound has also underperformed overnight which has been triggered by EUR/GBP breaking back above resistance from its 200-day moving average at around 0.8535 which may encourage further pound weakness in the near-term”.
“Fundamentally the pound is being undermined by the market moving to delay the expected timing and scale of monetary tightening from the BoE”.
“The implied yield on the December 2014 and December 2015 futures contracts have declined by around 30 and 50 basis points respectively since early September”.
“The sharp decline in UK yields continues to highlight that they remain tightly linked to developments in US yields with delayed Fed QE tapering expectations also serving to undermine the pound in the near-term, even as the UK economy continues to remain in a robust recovery phase”.