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9 Aug 2013
Flash: Still room for GBP/USD upside? – BMO Capital Markets
FXstreet.com (New York) - The coming five business days will be an important stretch for UK data, with key releases on inflation, employment, housing and consumption littered across most of the week, notes Greg Anderson at BMO Capital Markets.
Key quotes
“For an economy like the UK’s, any developments in housing, consumption and real spending or income will be extremely important to watch, but if we had to pick a release which will is at the top of the food chain in terms of importance for the GBP/USD next week, we are likely to go with CPI.”
“The answer is that we have to remember the BoE’s knock-outs for dropping its interest rate anchoring strategy: one being a BoE forecast for 18-24 month CPI at 2.5% YoY and above. We should not lose sight of the BoE’s overall strategy of anchoring rates and sitting on the curve, and we still believe that good economic data from the UK should not be given the same weight as weak data in terms of fluctuations in the GBP.”
“To frame things in a slightly different matter, there is probably a bit more room for GBP upside on better data now that the latest BoE invent risk is out of the way.”
Key quotes
“For an economy like the UK’s, any developments in housing, consumption and real spending or income will be extremely important to watch, but if we had to pick a release which will is at the top of the food chain in terms of importance for the GBP/USD next week, we are likely to go with CPI.”
“The answer is that we have to remember the BoE’s knock-outs for dropping its interest rate anchoring strategy: one being a BoE forecast for 18-24 month CPI at 2.5% YoY and above. We should not lose sight of the BoE’s overall strategy of anchoring rates and sitting on the curve, and we still believe that good economic data from the UK should not be given the same weight as weak data in terms of fluctuations in the GBP.”
“To frame things in a slightly different matter, there is probably a bit more room for GBP upside on better data now that the latest BoE invent risk is out of the way.”