The pound has been beaten quite hard, falling over 800 from peak to trough in the past two weeks. Has it gone too far?
Here is their view, courtesy of eFXdata:
Credit Agricole CIB Research discusses GBP/USD outlook and flags a scope for some GBP rebound in the near-term.
“Following the recent GBP selloff, we believe that some negatives are already in the price of the currency going into the May inflation report that the BoE will publish next week.
We think that the report will keep the markets betting on further monetary normalisation in the UK later this year.
To the extent that it encourages frontloading of rate hike expectations, GBP could regain some lost ground across the board, CACIB argues.
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