7 Jan 2015
GBP/USD sell-off looks overdone – ANZ
FXStreet (Barcelona) - Brian Martin of ANZ cautions against becoming bearish on cable at current levels as the pounds currently looks undervalued against the USD, further expecting 1.50 levels to be a good medium term buy.
Key Quotes
“Cable’s plunge in early 2015 looks overdone as the pound is caught up in the disinflation theme. Further near term weakness may materialise but dips below 1.50 are a medium term buy.”
“Most observations of valuation suggest the pound is undervalued against the USD.”
“The economy has lost some momentum, but continues to perform favourably versus most of its peers.”
“We therefore caution against becoming bearish on cable at current levels and would view extended near term weakness as a buying opportunity.”
“However, political uncertainty and the looming prospect of outright sovereign bond purchases by the ECB are weighing on sentiment fuelling a continued appetite for dollars for the time being.”
Key Quotes
“Cable’s plunge in early 2015 looks overdone as the pound is caught up in the disinflation theme. Further near term weakness may materialise but dips below 1.50 are a medium term buy.”
“Most observations of valuation suggest the pound is undervalued against the USD.”
“The economy has lost some momentum, but continues to perform favourably versus most of its peers.”
“We therefore caution against becoming bearish on cable at current levels and would view extended near term weakness as a buying opportunity.”
“However, political uncertainty and the looming prospect of outright sovereign bond purchases by the ECB are weighing on sentiment fuelling a continued appetite for dollars for the time being.”