8 Aug 2013
Flash: GBP rallied by Carney has no near term plan - Danske Bank
FXstreet.com (Barcelona) - Danske Bank strategists note that Sterling rallied yesterday after Mark Carney formally laid out the forward rate guidance for the BoE.
Key Quotes
“However, when taking into account the importance of the announcement and the uncertainty about the outcome, yesterday’s decline in EUR/GBP from 0.8680 to 0.8600 was quite modest.”
“... implies that Mark Carney probably delivered quite close to expectations although one could argue that the 7% threshold was a bit higher than expected and that the ‘knockouts’ were tougher than expected.”
“Question is whether there is a new trend underway in Sterling.”
“Given the positioning unwinding currently in place and the slight disappointment in the announcement, the risk is skewed towards further GBP strength short term and the risk of a more pronounced GBP sell-off should be much smaller now.”
“However, one clear conclusion is that Carney has absolutely no plan to hike rates for the next three years and thus GBP will still be left with the most aggressive and dovish G4 central bank after the Bank of Japan.”
Key Quotes
“However, when taking into account the importance of the announcement and the uncertainty about the outcome, yesterday’s decline in EUR/GBP from 0.8680 to 0.8600 was quite modest.”
“... implies that Mark Carney probably delivered quite close to expectations although one could argue that the 7% threshold was a bit higher than expected and that the ‘knockouts’ were tougher than expected.”
“Question is whether there is a new trend underway in Sterling.”
“Given the positioning unwinding currently in place and the slight disappointment in the announcement, the risk is skewed towards further GBP strength short term and the risk of a more pronounced GBP sell-off should be much smaller now.”
“However, one clear conclusion is that Carney has absolutely no plan to hike rates for the next three years and thus GBP will still be left with the most aggressive and dovish G4 central bank after the Bank of Japan.”