GBP/USD: Supported Despite Soft UK Data; Dips A Buy – Credit Agricole

The British pound suffered from a drop in the manufacturing output but remained afloat. What’s next?

Here is their view, courtesy of eFXnews:

Credit Agricole Research discusses GBP outlook and notes that sterling has been well supported as of late, regardless of weaker than expected economic data releases.

“After all, somewhat weaker growth momentum failed to dampen medium-term inflation expectations as for instance implied by 5Y inflation swaps. In addition, BoE members continued to make a case of tightening monetary policy further.

We believe this view will be shared by a majority of central bank members and such prospects should lay the ground of the BoE tightening monetary policy further as soon as next month.

As a result to the above outlined conditions we stay in favour of buying GBP dips,” CACIB argues.

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