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4 Jun 2015
EUR/GBP sell the rallies towards 0.7400 – Rabobank
FXStreet (Edinburgh) - Jane Foley, Senior Currency Strategist at Rabobank recommends selling the cross with target around the 0.70 area.
Key Quotes
“While sterling remains sensitive to UK data releases, it remains the case that a hike from the BoE is still likely to come at a time when the ECB is still pursuing its QE policy”.
“Yesterday, in order to offset talk of an early tapering of QE, ECB President Draghi confirmed his commitment to the full programme”.
“Since we are sceptical about the Eurozone’s reflation story we expect Draghi to continue to follow this course”.
“We are concerned that a rise in ‘cost push’ inflation may be a downside risk to the Eurozone economy and we are also worried about the impact on growth from the slow pace of structural reform”.
“It follows that we are sceptical about the sustainability of the present push higher in Bond yields which are lending support to the EUR”.
“We view rallies towards EUR/GBP0.74 as selling opportunities and maintain our 6 mth target of 0.70”.
Key Quotes
“While sterling remains sensitive to UK data releases, it remains the case that a hike from the BoE is still likely to come at a time when the ECB is still pursuing its QE policy”.
“Yesterday, in order to offset talk of an early tapering of QE, ECB President Draghi confirmed his commitment to the full programme”.
“Since we are sceptical about the Eurozone’s reflation story we expect Draghi to continue to follow this course”.
“We are concerned that a rise in ‘cost push’ inflation may be a downside risk to the Eurozone economy and we are also worried about the impact on growth from the slow pace of structural reform”.
“It follows that we are sceptical about the sustainability of the present push higher in Bond yields which are lending support to the EUR”.
“We view rallies towards EUR/GBP0.74 as selling opportunities and maintain our 6 mth target of 0.70”.