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13 Mar 2013
Forex Flash: GBP/USD remains a sell on rallies – Rabobank
The sterling is navigating weekly highs in the area of 1.4950/60 after buying interest lifted the pound from yesterday’s multi-year lows in the vicinity of 1.4830
According to Jane Foley, Strategist at Rabobank, the UK Budget due next week has grown in relevance as Chancellor Osbourne could announce a change in the BoE’s remit, allowing more QE despite the higher inflation. Coupled with yesterday’s lacklustre data from the industrial sector would pose further downside risks for the sterling.
“That said, while there is a lot of bad news with respect to the economy priced into the pound it is not clear if the market has fully prepared for a potential era of more aggressive policy easing. We continue to favour a policy of selling sterling on rallies”, Foley concluded.
According to Jane Foley, Strategist at Rabobank, the UK Budget due next week has grown in relevance as Chancellor Osbourne could announce a change in the BoE’s remit, allowing more QE despite the higher inflation. Coupled with yesterday’s lacklustre data from the industrial sector would pose further downside risks for the sterling.
“That said, while there is a lot of bad news with respect to the economy priced into the pound it is not clear if the market has fully prepared for a potential era of more aggressive policy easing. We continue to favour a policy of selling sterling on rallies”, Foley concluded.