Mainly due to services sector-related business activity dropping to the lowest level in nearly two years, the GBP temporarily fell to multi-quarter lows.
Although the latest data supports a delay in BoE rate expectations, we advise against selling the GBP around the current levels.
It must still be considered that business activity expands at a healthy pace, what suggests limited downside risk to medium-term inflation expectations. Indeed, 5y forward breakeven rates have remained well supported above 3%.
As a result to the above outlined conditions we remain long GBP/CHF as a trade recommendation.
* CA holds long GBP/CHF from 1.5140 targeting 1.58.
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