GBP: A Buy On Dips At Current Levels; We Stay Long - Credit Agricole 08 Oct 2014 00:13 EDT Adam Myers, Senior FX Strategist Manuel Oliveri, FX Strategist story provider Share on print Print Share on email Email
Industrial production in August rose at a constructive pace, regardless of falling external demand expectations as related to weaker conditions in the Eurozone.
This in combination with still expanding services sector-related business activity should make a case of further improving labour market conditions to the benefit of stabilizing price developments.
Accordingly we expect investors’ BoE rate expectations to stay well supported keeping the GBP a buy on dips around the current levels, for instance against the CHF.
The cross should benefit from diverging BoE-SNB monetary policy expectations. This is especially true as lower than expected Swiss inflation in September should reinforce the SNB’s dovish monetary policy stance. We remain long GBP/CHF.
**CA runs a long GBP/CHF from 1.5140 targeting 1.5800.
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