Regardless of higher core prices in August, the GBP has been capped of late. It appears that this week’s Scottish referendum continues to keep investors’ buying interest for the GBP low.
Nevertheless, ahead of the referendum we see only limited currency downside. This is mainly due to speculative positioning having reached balanced territory already.
As such it will be about today’s BoE minutes and FOMC announcement to drive pairs such as GBP/USD in the very short-term. When it comes to the referendum we expect a positive outcome.
From that angle we believe buying GBP dips against the EUR offers good risk reward, at least from a broader angle.
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