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Jan 14 - 09:55 AM

GBP: Looks Expensive Vs USD And EUR - Credit Agricole

By eFXdata  —  Jan 14 - 09:05 AM

Credit Agricole CIB Research sees limited scope for further GBP gains in the near-term.

"Investors have been frontloading rate hike expectations ahead of the February BoE meeting but have not priced in a more aggressive tightening this year. As a result, our short-term FX fair value models, based on rate and box yield spreads, suggest that the GBP is looking expensive vs the EUR and USD," CACIB notes. 

"Moreover, we expect only two rate hikes this year and doubt that the MPC will be able to meet market expectations of four rate hikes this year," CACIB adds. 

Source:
Credit Suisse Research/Market Commentary

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