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5 May 2015
EUR/GBP: Resistance eyed 100 day sma near 0.7433 - Rabobank
FXStreet (Guatemala) - Jane Foley, Senior Currency Strategist at Rabobank explained, with political issues aside, they have been arguing that sterling has found good support this year from relative interest rates differentials as policy action from the ECB and other European central banks has driven down rates on the other side of the Channel.
Key Quotes:
"Even though the BoE is in no rush to hike rates, MPC members have played down any risk of a rate cut so we expect that once a workable UK government is installed that interest rate spreads will again support sterling this year albeit it at a moderated pace."
"Near-term, however, the focus is set to be on the election and then on the coalition negotiations which could be messy and which may take some time."
"We expect the pound to remain on the defence vs. the EUR in the coming sessions failing any signs that a Conservative, Lib Dem coalition government could again command a majority. The recent high near EUR/GBP0.7420 and the 100 days sma near 0.7433 should provide some resistance."
Key Quotes:
"Even though the BoE is in no rush to hike rates, MPC members have played down any risk of a rate cut so we expect that once a workable UK government is installed that interest rate spreads will again support sterling this year albeit it at a moderated pace."
"Near-term, however, the focus is set to be on the election and then on the coalition negotiations which could be messy and which may take some time."
"We expect the pound to remain on the defence vs. the EUR in the coming sessions failing any signs that a Conservative, Lib Dem coalition government could again command a majority. The recent high near EUR/GBP0.7420 and the 100 days sma near 0.7433 should provide some resistance."