GBP / USD ready for a new test of 1.2800 – Westpac


Tim Riddell, strategist at Westpac Macro, create cable could attempt another visit to the area of 1.2800.

key Quotes

“A downward bias for GBP is maintained. The restoration of confidence and pipes investment will be key (note that the current account deficit in the UK is likely to remain around 6-7% of GDP) “.

“The rapid change in government leadership, recovering stock markets and lower GBP are comforting, but more signs of negative impacts on demand and growth will trigger further easing by the Bank of England. PMI and CBI surveys Markit highlighted the collapse of confidence and postBrexit expectations. the statement may be desirable, but these studies seems to be, as a member of the MPC out Weale said, enough to push the Bank to use its tools acceleration. it is the extension of its use is to determine the extent of the fall of GBP. “

“The expansion of the APP (by GBP50-75bn) and a rate cut by 25 basis points above that already are priced in markets, but retesting 1.2800 lows remains highly likely. However, any response now it would be softer cushion downside risks GBP – at the moment “.