GBP/USD: Stay Constructive & Avoid GBP; AUD/USD: Staying Short Post-RBA – Credit Agricole

The British Pound is under pressure amid Brexit concerns and the Aussie is not going anywhere fast.

Here is their view, courtesy of eFXdata:

Credit Agricole CIB Research maintains a bearish and short AUD/USD* targeting a move towards 0.7000, while staying sidelined GBP but maintains a medium-term constructive bias on sterling.

“The RBA left its cash rate unchanged at 1.50% as widely expected..The only significant changes in the RBA’s interest rate decision statement were in reference to local credit conditions. The RBA statement is a modest weight on the AUD given the Board expresses a little more concern about credit constraints, but the currency will continue to be mainly driven by UST yields as well as headlines on US-China trade tensions. We remain short AUD/USD,” CACIB argues.

“Stay conservative, avoid GBP…Investors should remain cautious about the near term outlook for GBP. Indeed, we think that the FX market participants would demand more concrete evidence that the UK and the EU are moving closer to a deal before unwinding some of their shorts in GBP,” CACIB adds.

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