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15 Aug 2013
Flash: GBP/USD squeeze likely? – BMO Capital Markets
FXstreet.com (New York) - Greg Anderson at BMO Capital Markets analyzes the outlook of the GBP/USD in the wake of earlier UK data coupled with the BoE.
Key quotes
“The recent UK data suggests that short GBP/USD squeezes will be very useful to the BoE if it wants to abruptly choke off an overheating of short- and medium-term inflation expectations.”
However, is now the right time for that squeeze to be occurring? “In terms GBP’s current levels, we think the market has decisively got ahead of the fundamentals, particularly when those [better] fundamentals are juxtaposed with the official stance of the BoE.”
Key quotes
“The recent UK data suggests that short GBP/USD squeezes will be very useful to the BoE if it wants to abruptly choke off an overheating of short- and medium-term inflation expectations.”
However, is now the right time for that squeeze to be occurring? “In terms GBP’s current levels, we think the market has decisively got ahead of the fundamentals, particularly when those [better] fundamentals are juxtaposed with the official stance of the BoE.”