22 Jan 2014
GBP for 1.59? - Scotiabank
FXstreet.com (Guatemala) - Camilla Sutton, CFA, CMT, Chief FX Strategist at Scotiabank eye's Sterling at 1.5900.
Key Quotes:
"On the back of a stronger than expected unemployment release, GBP is outperforming, up 0.4%. The unemployment rate dropped to 7.1%, well below the October print of 7.4% and expectations of 7.3%; while the gain in employment was 280k 3m/3m farsurpassing expectations of 256k. With inflation at target and unemployment falling rapidly towards the BoE’s 7% unemployment threshold the outlook for the BoE has shifted materially."
"In the most recent minutes of the MPC meeting (released today) the committee noted that the recovery was becoming more firmly entrenched and that unemployment had fallen faster than expected; but that there was no immediate need to raise the Bank Rate even if the 7% unemployment threshold were to be reached and that when the time for higher rates did come it would be appropriate to do so only gradually as there were still headwinds to growth and inflationary pressures were expected to be contained."
"The February 12th Inflation Report will be an important release and is likely to see the BoE take a further step away from the 7% threshold. However, all in all the outlook for the BoE is changing rapidly, which is supporting GBP and putting our year‐end 1.59 target increasingly at risk. C.S."
Key Quotes:
"On the back of a stronger than expected unemployment release, GBP is outperforming, up 0.4%. The unemployment rate dropped to 7.1%, well below the October print of 7.4% and expectations of 7.3%; while the gain in employment was 280k 3m/3m farsurpassing expectations of 256k. With inflation at target and unemployment falling rapidly towards the BoE’s 7% unemployment threshold the outlook for the BoE has shifted materially."
"In the most recent minutes of the MPC meeting (released today) the committee noted that the recovery was becoming more firmly entrenched and that unemployment had fallen faster than expected; but that there was no immediate need to raise the Bank Rate even if the 7% unemployment threshold were to be reached and that when the time for higher rates did come it would be appropriate to do so only gradually as there were still headwinds to growth and inflationary pressures were expected to be contained."
"The February 12th Inflation Report will be an important release and is likely to see the BoE take a further step away from the 7% threshold. However, all in all the outlook for the BoE is changing rapidly, which is supporting GBP and putting our year‐end 1.59 target increasingly at risk. C.S."