Currency strategists at Credit Agricole like buying dips in the pound, particularly against the Swiss franc.
Accordingly we see limited room of the GBP correcting lower from the current levels. On the contrary, we remain of the view that the currency should be bought on dips, for instance against the CHF.
This is also due to the view that risk sentiment is unlikely deteriorating further from the current levels.
They note that expectations for BOE rate hikes have diminished but say there is limited room for continued erosion because of improving services sector activity and labor market conditions.
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