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Sterling bulls sting by QIR – MP

FXStreet (Barcelona) - Dean Popplewell, Director of Currency Analysis and Research at MarketPulse observes that the pound after hitting a 14-month low in the overnight session (1.5758) is currently showing no signs of wanted to be purchased.

Key Quotes

“The pound outright has hit a new 14-month low in the overnight session (£1.5758), and is currently showing no signs of wanted to be purchased. It was expected that investors would “shun” the currency after the BoE slashed growth and inflation forecasts in yesterday’s Quarterly Inflation Report report.”

“Fixed income traders have already trimmed back their expectations for a first rate hike in interest rates (mid-year 2015 was previously their firm target).”

“Governor Carney and company expects the U.K economy to grow +2.9% next year, weaker than the +3.1% they had forecasted only three-months ago. They also expect to possible see inflation dip below the psychological 1% handle within the next six-months. U.K policy makers foresee the first rate rise in Q3, 2015.”

“There is little incentive in the short term to want to own GBP – nevertheless, do not be surprised if the market does happen to see better levels to “short” the pound. The lack of market participation has a habit of achieving this, especially closer to any holiday period.”

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