Deutsche Bank see the pound falling this week as the weaker construction and manufacturing data puts a downside risk in the Q2 GDP numbers next week.
They say that most of the domestic growth cycle is now probably priced in along with three rate hikes into July 2015. They also note that the market positioning is stretched.
1.7100 is still favoured, for the short term dip buyers at least, and anywhere north of 1.7130 is becoming the place to offload. The CPI data tomorrow and labour report Wednesday will be a big deciding factor for the pound this week.
CPI may not amount to much unless we see a big jump in the core number as that will get the hawks chirping.
A poor labour report might see the bears come out of hibernation as that will be three data points in short succession that will have disappointed.
It’s now my turn to play with the new toy and so let’s see if you agree or disagree with the DB call for the pound this week.
GBP/USD – Is a buy, a sell or going nowhere this week?
Buy
vote
Sell
vote
Going nowhere
vote
