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GBP underperforming its peers- Scotiabank

FXStreet (Barcelona) - Currency Strategists, Camilla Sutton and Eric Theoret of Scotiabank see the short term trend to remain bearish for the weak and underperforming GBP.

Key Quotes

"GBP is weak and underperforming its peers following the release of a BoE Inflation Report that contained material downward revisions to inflation projections and a heightened risk of sub-1% CPI over the next six months. Softened inflation is seen as resulting from the combination of global disinflationary pressures, lower commodity prices, and the impact of past currency appreciatio n on import prices. BoE Gov. Carney has stressed that the MPC remains data dependent with a tightening bias, despite the recent delay in rate hike expectations."

"GBPUSD short-term technicals: bearish—quickly approaching last Friday’s low near 1.5800, MACD and RSI are bearish, with near term resistance recently observed around 9 day MA (1.5915). Break of recent low shifts focus to 1.5722, the 61.8% Fibonacci retracem ent level of the July 2013-July 2014 rally."

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