25 Jun 2014
Sterling has been main event – BBH
FXStreet (Guatemala) - BBH Global Currency Strategy Team explained that Sterling's price action was the main dynamism in the foreign exchange market overnight.
Key Quotes:
“There has been a large build of long sterling positions in recent weeks, encouraged by the divergence of monetary policy trajectories”.
“As an example of the positioning, consider that the gross long sterling futures position is larger than the combined gross long position of the euro, Swiss franc, and yen. It rose from about 70k contracts a month ago to over 100k contracts as of early last week. It is the highest since late 2007, when sterling was above $2.00”.
“The pullback in sterling that pushed it below $1.70 for the first time in three sessions was not deep enough to wash out many longs”.
“Instead, it appears new buyers entered and sterling quickly rebounded. The $1.7030-50 area offers initial resistance”.
“The quick drop in sterling also helped lift the euro against the dollar and on the cross against sterling. The euro tested last week's high near GBP0.8025 before running out of steam”.
Key Quotes:
“There has been a large build of long sterling positions in recent weeks, encouraged by the divergence of monetary policy trajectories”.
“As an example of the positioning, consider that the gross long sterling futures position is larger than the combined gross long position of the euro, Swiss franc, and yen. It rose from about 70k contracts a month ago to over 100k contracts as of early last week. It is the highest since late 2007, when sterling was above $2.00”.
“The pullback in sterling that pushed it below $1.70 for the first time in three sessions was not deep enough to wash out many longs”.
“Instead, it appears new buyers entered and sterling quickly rebounded. The $1.7030-50 area offers initial resistance”.
“The quick drop in sterling also helped lift the euro against the dollar and on the cross against sterling. The euro tested last week's high near GBP0.8025 before running out of steam”.