GBP: Staying offered – ING
|
EUR/GBP is staying bid near the recent high of 0.8450/60, ING's FX analyst Chris Turner notes.
Above 0.8450/60, EUR/GBP can see 0.8500
"While we (and the UK sovereign credit default swap market) do not think this is a Liz Truss-style moment for UK sovereign risk, we do think the solution to the current challenges is sterling negative. To resolve the risk of breaching the fiscal rule, either the government needs to cut spending, the Bank of England to cut rates (lowering Gilt yields) – or both."
"There is not a lot on the UK data calendar this week apart from the November jobs data tomorrow. We also wonder whether Wednesday's release of the December budget figures will draw greater attention than normal."
"But overall, we see little reason for sterling to recover. Above 0.8450/60, EUR/GBP can see 0.8500. GBP/JPY is very much in focus as well given the prospect of the Bank of Japan hiking 25bp this Friday. 185 looks very possible here."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.