UK March retail sales have come in slightly softer than expected this morning. That has clearly been overshadowed by news from Iran, but retail sales should not change the picture anyway for the Bank of England.
Anyway, data this week has pointed to a lower probability that the BoE will start cutting rates before August, which is the month when our economist expects the first move.
That has led us to believe that EUR/GBP will struggle to find much support in the short term, despite our medium-term call on the pair being moderately bullish. If we do see a geopolitical risk escalation, GBP should, however, be in a more vulnerable spot than the euro, given the pound’s higher sensitivity to global risk sentiment and CFTC data showing that GBP has the largest net-long positioning in G10.
Anyway, data this week has pointed to a lower probability that the BoE will start cutting rates before August, which is the month when our economist expects the first move.
That has led us to believe that EUR/GBP will struggle to find much support in the short term, despite our medium-term call on the pair being moderately bullish. If we do see a geopolitical risk escalation, GBP should, however, be in a more vulnerable spot than the euro, given the pound’s higher sensitivity to global risk sentiment and CFTC data showing that GBP has the largest net-long positioning in G10.
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