GBP risk reward out of the window - Scotiabank

FXStreet (Guatemala) - Camilla Sutton, CFA, CMT, Chief FX Strategist at Scotiabank explained that the pound is down but notes that it is hard to make a call currently.

Key Quotes

"GBP is down reacting to a broadly stronger USD but also to a disappointing services PMI release (57.6) dragging down the composite to 57.6.

“The BoE Q1 2014 credit conditions survey suggest that there was an increase in available credit to both the household and corporate sector; and that demand increased for home purchases and corporates but fell for credit cards."

"In an article in the Northern Echo Governor Carney confirmed many of the things the market has already factored in, including that interest rates could rise before the May 2015 general election and that the pace of hikes is likely to be gradual.

“The BoE does not release its interest rate decision until next Thursday and there is minimal risk in the release."

"GBP/USD short‐term technicals: mixed—the MACD has flat lined; moving averages are providing limited signals and spot is testing the 50‐day MA. Technicals are providing little insight into the near‐term outlook; leaving better risk/reward elsewhere."